Thames Water has been named the country's worst polluter in a report by the Environment Agency.

Thames Water Utilities Limited was fined more than any other company for pollution incidents during 2000, said the agency's annual report, Spotlight on Business Performance.

The most serious incident occurred when the River Thames in south-east London was flooded with raw sewage and industrial effluent in January 2000.

On that occasion the company was fined £250,000 plus £12,847 costs.

The company appeared in court another four times last year, and was fined a total of £38,000, excluding costs.

Environment Agency chief executive Baroness Young said fines for pollution offences were too low, with the average business facing a fine of £8,532.

She added: "The Environment Agency takes a tough line with businesses that pollute but, with a few exceptions, the scale of penalties levied by the courts makes pollution, and prosecution, an acceptable risk and an acceptable business expense for too many businesses."

A Thames Water spokesman said: "Obviously we very much regret the incidents and we're doing all we can to try to ensure that they can't happen again.

"We've made a lot of progress since then.

"We've made an enormous investment in sewage treatment plants across the region."

"We don't think that their comments requesting an increase in fines really apply to us, because our fines have been way above the average."

"Certainly we want to improve our record. We do a lot of good work on the environment generally."

Thames Water has been prosecuted for pollution offences by the Environment Agency four times so far this year, incurring fines of £42,600.