Pollution is causing male fish to develop female characteristics.

Water companies were told to investigate ways of removing pollution from Sussex water six years ago.

The Environment Agency estimates it could cost £1 billion more than the Government and Southern Water propose to invest in tackling modern types of pollution.

Rivers in England are now cleaner than at any time since the early stages of the Industrial Revolution as a result of the clean-up effort of the last 30 years.

But scientists are increasingly concerned about the build-up of newer pollutants, such as agricultural chemicals and other substances used in many everyday products.

Peter Midgley, the Environment Agency's Sussex area manager, said most male fish downstream of the Horsham sewage works on the River Arun now showed female characteristics.

He said: "We have got rid of the older grossly polluting stuff.

"Now it is these new, more complicated things where we need to spend the money.

"We are beginning to see some slightly worrying trends.

"We feel we are seeing the effects of the more intensive use of fertilisers and intensive land use of the last three or four decades.

"We are missing out on the opportunity to further improve the river water quality on the Ouse, Adur, Arun and so on, and the groundwater and springs that feed them."

Southern Water expects to spend more than £800 million in the next five years in its Government-backed £2 billion business plan, unveiled last week.

The agency had lobbied for another £1 billion of spending to be included, mainly to do non-statutory work likely to become law as part of the emerging EU Water Framework Directive on inland water quality.

The company said measures to meet the new rules - dubbed the British Directive in Brussels because of the UK's close involvement in drafting the new rules - had been left out of the plans at the direction of ministers.

A spokeswoman said its proposed environmental work included removing nutrients such as nitrates and phosphates from rivers and streams.

Investigations into the effect of hormone-disrupting chemicals have been included as part of a wider national programme.

A spokeswoman said: "It is a case of balancing the needs of the environment, customers and costs."

Southern Water's proposals already translate into a 45 per cent increase in bills, the highest proposed by any of the large water companies.

Pete Bowler, of the campaign network Water Watch, said customers should not be made to pay more before it was known what work would be needed and how much it would cost.

He said: "The Environment Agency is being more grabbing than the water companies by asking customers to pay up now."