Ofwat has responded to mounting criticism of its performance by bringing forward £1.6bn of projects to improve sewage and drought protection.
Some £1.1bn of the money has been earmarked for storm drain improvements, overflows from which have led to huge levels of sewage dumping by water companies across the country.
According to a report last week by the Environment Agency, there were 825 sewage discharges daily on average across England in 2022 with United Utilities, in the northwest, alone responsible for more than 69,000 spills over 425,000 hours.
Of the other listed companies, Severn Trent was responsible for 44,700 spillages and Pennon subsidiary South West Water for 37,649.
Water companies are allowed to discharge sewage when storm drains get clogged up during heavy rain to prevent flooding but environmental groups, surfers and swimmers claim that dumping regularly takes place on dry days.
Ministers meanwhile want to introduce unlimited fines for water companies that over-pollute by lifting the current cap of £250,000.
Therese Coffey, environment secretary, said the government also wants to make sure " money from higher fines and penalties - taken from water company profits, not customers - is channelled directly back into rivers, lakes and streams where it is needed".
Water industry bosses say that spillages have reduced in recent years, but critics argue that is largely due to changes in the weather not actions by the companies themselves.
Ofwat said the remaining £500mln of the £1.6bn would help to improve water quality, install smart meters and support nutrient neutrality.
Shares in United Utilities were down 1.4% at 1,042p, Severn Trent by 1.4% at 2,839p and Pennon by 1.8% to 858p.