The BBC's consumer affairs correspondent Nicola Carslaw reports

In a survey for its magazine 'Which?', the Consumers' Association says the level of service does not justify prices which have risen by 40% since privatisation in 1989.

Although most people are happy with their water supply, three out of five feel they are getting less value for money than they were five years ago.

People are fed up of restrictions on use

Nearly half of all consumers have not recognised any improvements in service in the last few years and 70% think shareholders have benefited more than customers from privatisation in 1989.

One of the biggest areas of dissatisfaction uncovered by the report were water restrictions which 70% of people blamed on company leaks.

However, four-fifths of consumers are satisfied with the safety and appearance of their water, and two-thirds say their water had either always tasted good or had improved.

There are also varying degrees of satisfaction in different company areas.

Tastes good: most people are happy with safety and appearance

Customers of Northumbrian water, who pay an average of £235 a year, appear to be the happiest in the survey of 1,000 people, but many of their counterparts in southern England are much less satified.

The association says customers of South-West Water have the highest bills in the country with an average of £355 and are the least happy complaining about overall service, value for money and environmental policies.

But Thames Water customers, who pay the least - just £200 - also reported areas of dissatisfaction along with Anglian Water, households who pay an average of £325.

Companies 'baffled'

Which? Editor Helen Parker said the survey showed widespread customer dissatisfaction and called on the regulator Ofwat to introduce a one-off price cut for households.

She said: "Unlike other utilities, consumers can't take their business elsewhere if they are dissatisfied, so the big water companies need to acknowledge customers' concerns and regulators must ensure consumers' interests are protected."

Water companies say environmental work means prices rise

But through their industry association Water UK, the companies said they were "baffled" by the conclusions being drawn from the survey.

Chief Executive Pamela Taylor said a range of surveys had shown that customers did not regard price as the most important factor in evaluating water supply, with many putting services and environmental concerns higher up the agenda.