A WATER company is to axe 300 jobs in an attempt to reduce costs, it said today.

Welsh Water, which provides water and sanitation services to 1.2 million households in Wales and parts of England, will cut the water delivery jobs over the next five years.

The losses will be part of a restructuring of the company which wants to reduce operating costs by 20 per cent.

In a statement, the firm said it was working to meet "the toughest efficiency targets the company has ever faced".

Managing director Nigel Annett said: "Working closely with staff and our trade union colleagues, we intend to achieve this through a combination of retirements, natural staff turnover and voluntary severance."

Mr Annett added: "We have to achieve a reduction of 20 per cent in our day-to-day running costs.

"We will do this by exploiting our recent large investment in new technology, by eliminating duplication in management, and by investing in 'green energy' and processes to reduce power costs.

"This involves a considerable expenditure by the company, part of our planned £1.2 billion investment programme to improve services over the next five years."

Since 2001 Welsh Water has been owned by Glas Cymru, a not-for-profit company.