Average household water bills in England and Wales will rise by 11.8%, or £29, for the year beginning 1 April, the industry regulator Ofwat has said.
The new figure for 2005/06 takes inflation into account
The 11.8% figure is higher than the 8.5% which Ofwat said back in December would be the final price rise limit for the forthcoming year.
It explained on Thursday that the new figure took into account inflation, which was not previously included.
Ofwat said the rise was necessary to reflect the water firms' higher costs.
It added that the additional revenues would also enable the water companies to make further improvements to drinking water quality and the environment sought by the government.
"I realise that all bill increases are unwelcome," said Ofwat boss Philip Fletcher, director general of water services.
"But I can assure customers that bills are going up by no more than is necessary to enable water companies to continue to provide the high-quality water and sewerage services that customers require."
Despite the increases for 2005/06, Ofwat said that many households' water and sewage bills will still be lower in real terms than they were in 1999 - before Ofwat introduced a 12% reduction in bills from April 2000.
Back in December Ofwat said that average household water bills in England and Wales can rise by £46 to £295 a year by 2009.