Thames Water was condemned yesterday for losing a staggering 33 per cent of its water in leaks from the mains despite new technology to easily find and fix faults.

The amount of water the Oxfordshire supplier lost every day from ageing pipes equivalent to 261 litres per household was described as "unacceptably high" by a House of Lords committee.

However, the company said yesterday that its leakage rate was so high largely because of problems with the ground in the London area. In Oxfordshire it was meeting its targets.

Across the country, 23 per cent of the total water put into water mains is lost every day.

The all-party committee, whose report was published yesterday, demanded that suppliers make better use of new technology to accurately detect and repair leaky pipes.

Lord Selborne, the committee's chairman, warned the water crisis already afflicting the South East where hosepipe bans are in place would spread if there was a dry summer.

The report, entitled Water Management, calls for new regional water boards to work out the best regional measures to cut wastage.

It demands the Government makes it easier for water companies to install water meters in every home, while providing extra benefits for people struggling to pay their bills.

But it rejects calls for a national "water grid", with new canals built to move water from high rainfall areas to the parched South East, as too expensive.

The peers also raised concerns about the "very high level" of unpaid water bills and recommended the Government examine the option of partially disconnecting those people who could afford to pay but refused to do so.

Planning Minister Yvette Cooper yesterday played down the prospect of the Government restricting the water supply of non-payers.

Thames Water spokesman Robin Markwell said: "In Oxfordshire we're meeting our leakage targets. But in London, where it's a big issue, we're in the process of replacing pipes which are old and crumbling. We also use a range of technology to detect leaks, from electronic microphones placed around valves to detect sound waves to simple listening sticks."

In its last recorded annual figures, for 2004-5, Thames Water's target was to reduce leaks to 115 million litres a day for the area outside London, which includes Oxfordshire. It managed 112 million litres a day.