Thames Water is hoping a new device called a Leakfrog will help it save millions of litres of water lost each day to leaks.

If a leak is suspected a Leakfrog is attached to a water meter overnight and will show how much water has being lost.

One of the inventors, Nic Clay-Michael, said: "They have been specially designed so they can be fitted easily to our meters in large numbers.

"They tell us if a leak is present, something our previous methods haven't been able to do on such a large scale."

Thames Water, which is responsible for providing homes across Oxfordshire with water, loses 170 million litres a day through leaks - an estimated 25 per cent from customers' pipes.

John Halsall, director of water services for Thames Water, said: "We are making great progress on tackling leakage. It is still our biggest priority.

"Until now, this water loss has been extremely difficult to pinpoint and account for. With Leakfrog we can get a better idea of how much water is leaking from the customer's side."

In September last year, water regulator Ofwat ran out of patience with Thames Water and threatened to fine the company £12.5m for customer service failings.

Thames Water found itself in trouble after failing to tell Ofwat that 17,000 of its customers were due compensation totalling £500,000 - roughly £29 each.

None was paid. Ofwat planned to fine the Reading-based company £11.1m for failing to provide robust information and £1.4m for the "poor processes and systems" that it says led to a poor customer service.

In July last year, Thames Water was officially named and shamed as the leakiest water supplier in the country, losing the equivalent of the water used by two people in every household in the region every day.

Figures showed Thames lost 895 million litres a day between April 2005 and March 31 2006, but Ofwat said it would not fine the company for missing its leak target for the third consecutive year.

Instead, Thames was forced to commit a further £150m towards pipe repairs and, in August last year, succeeded in reducing the amount of water lost through leaks for the first time in four years.