LONDON (Reuters) - Britain's water industry regulator Ofwat said on Wednesday that an average 8 percent hike in water bills planned by Thames Water was not justified.
"We said we would challenge Thames Water's request," said Ofwat's chief regulation officer, Sonia Brown.
"We have looked at the details and do not believe the current evidence justifies an increase in bills."
Thames Water, which has 14 million customers in London and the south east of England, in August submitted a request to increase prices above the limits agreed in 2009.
Ofwat said it would take a final decision on the increase next month after a short period of technical consultation, which allows for the submission of new evidence.
A consortium led by Australian investment bank Macquarie bought Thames Water for 8 billion pounds ($12.8 billion)in 2006, in what was then the largest deal in the sector.
($1 = 0.6262 British pounds)
(Reporting by Paul Sandle; Editing by Pravin Char)