Campaigners have accused a water company of cutting costs at the expense of the environment.

Southern Water has announced proposals to increase water bills by 7.2 per cent year on year from 2005.

The plans would see the average bill of £249.88 rise £17.60 every year, excluding inflation, an increase of £88 by 2010.

The company has asked industry regulator Ofwat to allow the rates increase in its draft business plan, which describes its future projects across Sussex.

The plan highlights savings of £1,000 million, after the company ruled out implementing recommendations by the Environment Agency on water quality, which are not a legal requirement.

If it included all the agency proposals, bills would rise by an average of £55 over five years.

Environmental pressure group Surfers Against Sewage was disappointed by the plans.

Campaign director Vicky Garner said: "It's quite clear Southern Water plan to spend no more money than is legally required, even if it is to the detriment of the region as a whole.

"Looking for the cheapest, easiest solutions to sewage problems in the region may be what is best for the company's pocket but there is a danger in the long run the people of the region will lose out.

Ms Garner highlighted concerns the company did not intend to use ultra-violet disinfection to treat sewage pumped out to sea from the proposed wastewater treatment works in Brighton and Hove.

The firm instead plans to carry out secondary treatment, which is all it is required to do by law but does not clean sewage as thoroughly.

Pensioners' groups fear a rise in bills may prove too much for some elderly people.

Sheila Schaffer, secretary of Brighton and Hove District Pensioners' Association, said: "Any increase in price is bad for elderly people living on a basic pension. These water bill increases will clearly be felt by some of the less well-off."

In the foreword to the business plan, Southern Water managing director Stewart Derwent acknowledged the difficulties of striking the right balance.

He said: "We have had to make difficult choices and cannot address all of the issues which face us without significant increases in bills.

"We have therefore had to prioritise and postpone addressing a number of issues until after 2010."