LABOUR has backed moves toward a criminal investigation of Southern Water after Ofwat announced today that the utility privateer had been fined a record £126 million for numerous sewage spills and fiddled water-quality test results.

The industry watchdog’s probe discovered that the company failed to operate a number of wastewater treatment works properly between 2010 and 2017. This included underinvestment in equipment that then led to failures and spills of wastewater into the environment.

Ofwat added that Southern Water had also manipulated its wastewater sampling process, meaning that information was misreported for years, thus dodging penalties.

Ofwat chief executive Rachel Fletcher said: “What we found in this case is shocking. In all, it shows the company was being run with scant regard for its responsibilities to society and the environment.”

Southern Water, which serves Kent, East and West Sussex, Hampshire and the Isle of Wight, will now refund £123 million to customers via their bills and pay a fine of £3 million, the largest package the regulator has ever imposed.

Today the Environment Agency said it takes the matter “extremely seriously” and is now investigating Southern Water’s actions and their environmental impact. A spokesman said the agency expected to start court proceedings soon.

Shadow business, energy & industrial strategy secretary Rebecca Long Bailey said she supports an investigation into whether criminal charges should be brought against the company and individuals involved in the scandal.

She said: “It is totally unacceptable that we have one law for the rich and powerful in our country and one for everyone else.

“Sometimes, fines are not enough. The regulator has found that there was a covering-up of the extent of underinvestment, which included serious risk to the environment and safety of water.”

Ms Long Bailey promised that a Labour government would ensure water companies are “run for the benefit of us all” by taking them back into public ownership, lowering bills and investing to safeguard water quality instead of “ripping off customers and creaming off the profits.”

Southern Water customers will receive a rebate of £61 spread over the next five years.

We Own It director Cat Hobbs said that Southern Water had shown “complete and utter disregard” for both the environment and the public by allowing the pollution and covering it up for seven years.

“But this is standard practice from our privatised, profiteering water companies,” she told the Star. “The Environment Agency has found that just 14 per cent of our rivers meet minimum standards, largely down to water company pollution.

“Enough is enough: It’s time we brought our water into public ownership and made our water system work for people and the planet rather than private profit.”

Southern Water’s current chief executive Ian McAulay, who was appointed in 2017, said: “There are no excuses for the failings that occurred.

“We have clearly fallen far short of the expectations and trust placed in us by our wastewater customers and the wider communities we serve.

“We are fully committed to the fast pace of change delivered since 2017. There is a lot more work to do, but we’re pleased that this proposal agreed with Ofwat enables us to fully make amends to our customers and regain their trust as quickly as possible.”

Up to 200 jobs are set to be axed at Southern Water in Sussex after staff were told on June 13 that customer-service jobs at the company’s headquarters in Durrington and some staff at its offices in Falmer would be handed over to outsourcing company Capita.

Some posts will move to Rotherham in Yorkshire, while others will move to Bangalore in India as Capita prepares to make the redundancies on August 1 after taking over the contract.

The exposure of the Southern Water scandal came as waste giant Biffa was found guilty today after a three-week jury trial of breaking the law by sending household rubbish to China.

Shipments labelled waste paper actually included nappies, sanitary towels and condoms, according to the Environment Agency.

Women’s underwear, plastic bottles and metal pipes were also found inside multiple 25-tonne containers bound for the east.

But Biffa has “strongly contested” the London Wood Green crown court decision, claiming that its containers were regularly inspected by Chinese customs agents and that firms buying the waste often inspected containers before they were shipped to make sure they contained 98.5 per cent paper, which is the industry standard.