Water firms will reportedly be allowed to hike bills by more than originally expected over the coming years.
According to the BBC, regulator Ofwat is set to allow water companies to increase bills by more than the 21% initially suggested for the five years to 2030.
Ofwat had signalled the increase in July, which would equate to an average £19 increase per year over its latest regulatory period.
However, the BBC reported Ofwat was considering allowing water companies to charge even more to reflect higher financing costs, with the latest regulatory period set to also see firms required to pump investment into network upgrades.
A new independent advisory commission is also set to be unveiled on Wednesday to oversee a “proper reset” of the industry, the report said, ahead of the largest overhaul of the sector since privatisation in the 1980s.
Separate figures published by Ofwat on Tuesday showed almost all of England and Wales' water companies had requested higher bill increases.
Southern Water proposed increasing bills by 44% between 2025 and 2028, while London supplier Thames, which has emerged on the brink of renationalisation under mounting debt, had requested a 23% hike.
No final decision on hikes has yet been made, with Ofwat expected to unveil plans for the upcoming regulatory period later in the year.
Ofwat added it had "made it clear that companies needed to provide better evidence" to justify higher bill increases.