A south-eastern water company has become the first to get government approval for the right to compel all its customers to fit water meters.

Folkestone and Dover Water Services' successful application for 'area of water scarcity' status means it will be able to accelerate its programme of switching household customers over to water meters.

That programme is at present mainly voluntary. The company could then charge all its customers according to how much water they use. The move is designed to help the company match limited supplies to increasing demands for water over the next 10 years as part of its longer term water resources planning strategy.

Elliot Morley, Environment Minister, said: "In many parts of the country water is a precious resource which we can no longer simply take for granted."

"Today's decision is a considered response to the specific long term challenges facing Folkestone and Dover water company; it is not a reaction to the short term problem of low rainfall in the south east of England."

"Folkestone and Dover will face increasing difficulty over the next 10 years in matching its limited water resources to the growing amount of water used. Metering will have an important role to play in helping to reduce this demand as well as sending a signal about the benefits of water saving."

The minister also said that a vulnerable groups scheme already in place will provide protection from high metered bills for customers with large families or some medical conditions who are in receipt of certain benefits.

The company expects to increase the number of households metered in its area from the present 40% to 90% over the next 10 years. The company estimates that metering these households can reduce their water use by 10-15%.

The view of the Environment Agency is that an increase in metering could provide about half the margin of supply over demand that the company needs by 2015.

The company is also expected to follow other measures, including exploring new sources, minimising leakage and encouraging water efficiency.