Thames Water's water resource management plan has received approval from the government.
The plan outlines the strategy for providing a secure and sustainable water supply for the next 50 years.
The Environment Agency has designated the southeast of England as seriously water stressed, putting substantial pressure on its resources.
The plan addresses the challenges of a growing population, climate change, and environmental protection.
Chris Weston, CEO of Thames Water, said: "I welcome the secretary of state’s approval of our plan, which is a vital step as we work to secure future water supply for millions of people across the South East.
"In delivering this plan we will invest in new world-class infrastructure projects, continue to drive down leakage and reduce demand for water.
"In turn, this will significantly reduce our reliance on groundwater sources that draw from chalk streams, protecting the local environment."
Thames Water collaborated with Water Resources South East (WRSE) and neighbouring water companies to create a plan that it says protects resources across the region.
Chris Murray, independent chairperson at Water Resources South East, said: "Our aim is to secure the region’s water supplies and improve the environment for the future.
"The government’s support of this plan is a welcome step as we work to meet the challenges ahead."
The plan includes a commitment to reduce leakage and customer demand for water.
Thames Water intends to more than halve leakage by 2050, and aims to reduce daily water use to 110 litres per person by 2050, from the current 140 litres per person.
More than one million smart meters have been installed across London and the Thames Valley, with plans to install or upgrade a further 1.1 million over the next five years.
The plan includes two nationally significant projects: a new 150 Mm3 reservoir in Oxfordshire, known as the South East Strategic Reservoir Option (SESRO), and the Teddington Direct River Abstraction project, a new abstraction on the River Thames upstream of Teddington Weir.
Thames Water has been in the spotlight recently for a number of issues, including how it is set to run out of cash in May 2025, with plans to increase customers' bills by 44 per cent to help with bringing in funding for infrastructure updates and to tackle the sewage leaks.
Thames said pollution incidents increased to 350, up on 331 last year, which it blamed on a rainier-than-expected year.
Customer and community feedback is central to Thames Water’s future infrastructure plans.
The company recently completed a 12-week consultation on its design plans for the proposed new reservoir near Abingdon, in Oxfordshire, receiving more than 1,500 responses, and hosting more than 1,200 attendees at its community information events.
All consultation responses are independently verified by Ipsos.
The feedback will inform the next stage of the design process, and Thames Water will provide a formal response to the public consultation early next year.
Communities and stakeholders will be invited to have their say on the revised proposals for the reservoir next summer.
Later this autumn, the company will host a series of community information events in west London to update local people on plans for its proposed Teddington Direct River Abstraction Project.
Thames Water will publish its final Water Resource Management Plan on its website in October 2024.
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