Thames Water has announced plans for a major new reservoir to help cope with increased demand in the future.

The company, which recently withdrew an application for a drought order, said the proposed site near Abingdon in Oxfordshire would hold approximately 150 million cubic metres of water and is part of a package of measures to help secure supplies for its customers. It is also proposing that water meters should be fitted to homes on change of occupancy and says it is spending £0.5m a day on finding and repairing leaks in the London area.

The company’s environment director Richard Aylard has warned that despite increased rainfall in recent weeks groundwater levels remain low and the company may need to re-apply for a drought order early in 2007.