Thames Water to downsize its reservoir as demand dries up

A giant reservoir designed to guarantee London's water supply has been downsized because of the credit crunch.

Thames Water planned to build a £1 billion 3.9 sq mile lake holding at least 150 billion litres of water — roughly half the size of Windermere.

But the project has now been delayed by seven years and its capacity has been cut by a third. Thames Water said the economic downturn would lead to a reduction in demand for drinking water.

Chief executive David Owens said: "We are now predicting a slower increase in population and household numbers...

"This means that overall demand for water will increase more slowly than previously forecast, particularly in the next five years."

The firm originally proposed to build the reservoir between East Hanney and Steventon in Oxfordshire.

Construction was due to begin in 2011 and end in 2016 but the project is now scheduled to be completed by 2026. Thames insisted that the reservoir will still be built.

Many residents are opposed to any reservoir. Nick Thompson, spokesman for Group Against Reservoir Development, said: "[Thames Water's] water demand figures have gone down, so it should scrap the plan altogether."