Householders across York and North and East Yorkshire are to benefit from lower water bills over the next two years

At the same time, the company has won the go-ahead for a £1.9 billion investment in new infrastructure to tackle problems such as sewerage flooding and water leakage from pipes.

The changes come about under final proposals published by the water industry regulator Ofwat today. A Yorkshire Water spokeswoman said the average bill will rise by from £331 to £332 over the five years.

Chief executive Kevin Whiteman said the company would be carefully considering details over coming weeks. “However, our investment plans were built around delivering what customers told us they wanted from us and we welcome the confirmation from Ofwat on the additional investment in sewer flooding and bathing water quality in particular,” he said.

“The company’s track record for efficiency, recognised as benchmark in the industry, means that we were able to submit a plan which promised further service and environmental improvements for the people of Yorkshire, whilst at the same time maintained stable pricing over the five year period. We believe we have struck the right balance.”

The spokeswoman said the investment would underpin the security of thousands of local jobs and providing a much needed boost to local firms.

“Yorkshire Water provides contracts and work to over 1,000 local businesses and supports many thousands of local jobs,” she said. “The company's continued investment programme plays a vital role in the economic wellbeing of the region.”

She confirmed that customers in the York area, whose water used to be provided by the former York Waterworks Company, will continue paying less for their supplies than people elsewhere in Yorkshire.

York MP Hugh Bayley said recently that water bills will remain almost £50 a year less, maintaining a 15 per cent discount established when York Waterworks was taken over by Yorkshire Water in 1999. The discount does not apply to sewerage charges.