Domestic water bills are set to rise by at least 5.2% to an average of nearly £375 a year.
Yet water companies are calling for a higher than inflation rise and industry regulator Ofwat will announce its decision on the exact size of the hike in bills tomorrow.
Bills for England and Wales to be issued in the spring for 2012-13 are expected to go up by the retail price index rate of inflation, currently 5.2%, but water companies are calling for much bigger increases to fund investment in new infrastructure and repairs.
Raising water rates in line with inflation would add £18.50 to the average household bill, taking it to £374.50. However, increases in some areas, such as the South-West where the average is already more than £500, are likely to be much higher.
A spokesman for Ofwat told the Daily Express: "The increase is worked out by Ofwat in conjunction with the water companies.
"They come to us with a business plan and we will scrutinise it. The last time we had a review, in 2009, water companies wanted an increase of 10 per cent on top of RPI.