Water companies in England and Wales have all hit or beaten their leakage targets for 2007-08, according to Ofwat's latest figures.
Overall leakage has dropped by 127m litres per day - equal to the needs of nearly a million domestic customers.
At its peak in 1994-95, overall leakage was 5,110m litres a day. By 2009-10, overall leakage is expected to have fallen to 3,300m litres a day.
Performance data for the last financial year also shows the number of sewage treatment works seriously breaching permit limits and threatening the environment has fallen to its lowest number in 10 years.
The number of serious sewage related pollution incidents fell from 115 in 2006-07 to 83 in 2007-08. This is just a fifth of the level 12 years ago.
Ofwat said most companies have also reduced the number of properties at risk of sewer flooding, although incidents increased during the year because of the summer floods.
Regina Finn, chief executive of Ofwat, said: "This is a positive picture, showing that the water sector can and is meeting the needs of consumers and the environment.
"This has been driven by the action we have taken in key areas like controlling leakage, asset management and improving customer services.
"Now it is important that companies maintain this progress, and raise their game even more.
"Rising consumer expectations, the impact of climate change, and the demands of a growing population will all provide new challenges.
"We will expect the sector to meet these challenges while continuing to deliver high-quality, good value services to consumers."
Thames Water still has by far the highest level of leakage, with 715m litres a day in 2007-08. But this has dropped by about 200m litres in the last two years, and the current figure far exceeded Ofwat's 7755m litre-a-day target.
Chief Executive, David Owens, said: "While we're obviously delighted, but there's still much more to do.
"So far we've replaced nearly 900 miles of the oldest and leakiest water mains and we're aiming to replace hundreds more. It's what our customers have told us they want."
Return to green news headlines
View Green News Archive