A FINE imposed on Thames Water over service standards and reporting failures has been slashed.

Ofwat has reduced the initial proposed penalty for providing false information from £12.5m to £9.7m because the regulator has decided Thames Water did not do so deliberately.

The company's fine of £1.4m for sub-standard customer service will remain, while the £11.1m penalty for poor information has been cut to £8.3m.

The Consumer Council for Water expressed surprise that the fine has been reduced and disappointment that the money will go to the Government, rather than customers.

National chair Dame Yve Buckland said: "Penalties can and should directly benefit consumers, and make it very clear to companies that breaking the rules will not be tolerated.

"Where penalties occur, consumers should benefit first. They should not be just another source of income for the Treasury.

"As a minimum, Thames Water needed to get their reporting systems in order and compensate the customers who had been affected.

"We have serious concerns over the number of water companies being investigated or fined by Ofwat, especially when consumers do not see some benefit at the end of the process.

"The incidents of companies misreporting, deliberate or not, have had a serious negative effect on consumers' views of the water industry and companies will need to work hard to restore their credibility."

Thames Water chief executive David Owens said the failings happened under previous management and welcomed the decision.

He said: "We are pleased that Ofwat have accepted our representations on the level of the fine."

"This is still a high figure considering that the failures were unintentional, rather than deliberate, but we welcome the reduction."

Ofwat chief executive Regina Finn said: "Thames Water's systems and processes were inadequate and customers lost out.

"The penalty reflects the importance we attach to reliable, accurate and complete information and gives a clear signal to both the company and the water sector that non-compliance is not a cheap or easy option."

Thames Water has 13 million customers in London, including Redbridge and Waltham Forest. and the south east of England.