The former boss of Southern Water faces a criminal charge over allegations he and others manipulated quality testing.
The Environment Agency said it planned to prosecute Matthew Wright, the former chief executive, and three others on the charge of conspiracy to defraud the agency and the industry regulator Ofwat.
It alleged that they manipulated testing at a waste water treatment works between 2012 and 2017.
The charge of conspiracy to defraud carries a maximum sentence of 10 years in prison.
A spokesman for the agency said: “We can confirm that we are taking criminal proceedings against Southern Water Services Limited and a number of former employees.
“We take our responsibility to protect the environment very seriously and will always pursue and prosecute those alleged to have committed serious offending against the environment.”
Those facing prosecution alongside Mr Wright are Philip Barker, former operations director of waste water; Clive Massey, former head of waste water compliance; and Mark Gregory, who oversaw water operations as well as being regional treatment manager.
The Environment Agency said three other men – Mark Butler, Terry Stephens and David James – faced charges over a failure to comply with environmental permits.
Stephen Shergold, solicitor to Mr Wright, said: “Mr Wright denies all wrongdoing and has cooperated fully with the Environment Agency’s investigation.”
The case relates to the alleged abuse of “operator self-monitoring”, a practice introduced in the water industry in 2009 as part of deregulation. The practice requires water companies to take samples and report the results to the Environment Agency.
Under the rules in place at the time, if an inspector or testing team showed up to take a sample but no water was flowing out of the plant – known as a “no-flow event” – the test would not be conducted. By default, the site would be marked as compliant for that test.
The Environment Agency alleged that there was a conspiracy to engineer artificial “no-flow events” at waste water treatment works.
Angela Eagle, the Environment Secretary, said the Government had committed to ending the practice of operator self-monitoring.
Southern Water will separately face charges of breaching environmental permits. The utility serves almost five million people across the south east of England.
The charges are the culmination of a years-long investigation by the Environment Agency. The quango announced them on Wednesday after a ruling confirmed it had the powers to prosecute the former employees.
Mr Wright ran Southern Water between 2011 and 2016. He was paid £873,000 in his final year in charge, including a “golden goodbye” worth almost £370,000.
During Mr Wright’s tenure, Southern Water’s environmental performance was rated among the very worst in England.
An operational failure in 2012 resulted in 40 million litres of untreated sewage spilling into oyster beds. This contributed to a record breaking £90m fine in 2021.
The case will be heard at Medway Magistrates’ Court.