Londoners could face water shortages within the next 10 years if Thames Water fails to tackle leakage and increasing demand.

In a report published this week, the London Assembly’s Environment Committee reveals that the capital’s water loss through leakage is the highest in the country. Nearly 1,000 million litres of water per day were lost in 2003/04 – enough to fill 17 Olympic sized swimming pools every hour.

The leakage rate of almost 40% makes up more than a quarter of all water lost in England and Wales. But Thames Water, the biggest water supplier in London, has not reached leakage reduction targets for the last five years despite high levels of investment.

While Thames Water intends to replace more than 850 miles of water mains in London during the next five years, solutions are still being agreed on a piecemeal basis with no detailed plans put forward for a long-term programme, said the committee.

However, reduction of water leakage will not be enough to address future water supply problems for London and the South East. There must be comprehensive and coherent action on changing consumer attitudes alongside improvements to the buildings we live in and the equipment we use. Consumer awareness must be raised and water efficient behaviour rewarded.

Darren Johnson AM, Chair of the Committee, said, "We’re storing up major problems for the future. Planned development in London and the South East will stretch water supplies to the limit. Thames Water’s consistent failure to achieve the leakage reduction targets is completely unacceptable. Water companies’ priorities seem to be big profits and dividends and bonuses for executives and shareholders. Continuing this attitude will be disastrous."

The Committee also believes developers and builders must take more responsibility for water conservation so that individual householders can reduce their water use. To support this, the government should strengthen existing policy governing water resources.

This view is echoed in a report published Wednesday. The Green Alliance warns that "without Government action and greater incentives for builders, the South East is likely to suffer extreme water shortages as the Government’s building programme and climate change take hold."