Downing Street has indicated that action on water bills is to be  announced next week to address concerns about high utility prices.

A spokesman from 10 Downing St. said it wanted regulators to examine whether the market was delivering for consumers.

The Oposition leader Ed Miliband has said the water industry should be scrutinised, alongside energy, to deal with what he says is a cost of living crisis.

Thames Water has said it wants to increase bills by up to 8%.

But regulator Ofwat has challenged the proposed increase and is examining whether financial gains the company has made elsewhere make such bill rises unnecessary.

Thames Water is the only one of the 18 regulated water companies to have applied to the regulator to increase prices in advance of the next pricing review.

Unlike gas and electricity, consumers cannot switch their water suppliers.

Concerns have been raised about price levels in parts of the country, particularly the south west of England, where consumers were given a £50 rebate on their bills earlier this year.

'Low as possible'

A spokesman from number 10 said the Prime Minister took the size of household bills across the piece seriously.

"There will be some action next week from Defra with the intention of looking at water bills," he said.

"The prime minister wants to see household costs across the piece being reduced as low as possible. The intention is to try to reduce the burdens on hard-pressed families."

The prime minister "wants regulators to look at the industry they regulate and make sure that they are robust and delivering what they need to deliver for consumers", the spokesman said.

Mr Miliband told the Western Morning News: "I think we should be looking at all markets to make sure they are working properly and that includes the water industry.

"I think the water industry is something that should be scrutinised to make sure it is working properly and make sure it is working properly for the benefit of consumers, because I know concerns have been raised.

"I'm proud Labour is championing this agenda and I think it is consistent with believing what a market economy can do, and water is part of that."

Shadow Environment Secretary Maria Eagle called on Mr Cameron to "require water companies to introduce a social tariff to help those who are struggling".

She said Labour would seek to amend the forthcoming Water Bill legislation to "require all water companies to participate in a national affordability scheme and review whether there is a need for a tougher regulatory regime".