The Times reports that the government has privately asked water companies to explore saving money on future water supplies by assuming unrealistically low levels of climate change.

Water firms are required to publish “water resources management plans” every five years for how they will ensure the water supply for the next 25 years, including new reservoirs and transfers from wet to dry parts of the country.

Amid rising government concern about how environmental targets will push up consumer water bills, the Environment Agency wrote to water companies in July to ask them to ensure their plans “protect your customers from adverse bill impacts”.

The agency said Thérèse Coffey, the environment secretary, had asked it to “investigate the scale of investment needed” in the context of “many families and individuals struggling to pay their utility bills”.

The regulator said companies should see how they could minimise costs from 2030 onwards, while meeting legal requirements. One option given was to see if money could be saved by assuming a “low climate change scenario”.

In the scenario, countries around the world would act dramatically to cut carbon emissions and ensure the global average temperature rose by only 1.6C above pre-industrial levels.

However, such a low level is considered unlikely. The United Nations has said countries’ climate plans put the world on track for 2.4C of warming at best and 2.8C at worst.

Earth has already warmed by 1.2C above the 1850-1900 average due to climate change and July was the hottest month on record.

“With hot tub temperatures at sea and many rivers still recovering from drought, the climate and nature crisis is clearly upon us. Yet the government is steering water companies toward the most optimistic warming scenarios,” said Eleanor Ward, policy officer at Wildlife and Countryside Link, an alliance of environmental groups including the National Trust and RSPB.

Climate change is expected to bring hotter, drier summers and warmer, wetter winters to Britain, putting pressure on water supplies. Even with an “exceptionally wet” July, parts of southwest England remain in drought. Devon and Cornwall remain under a hosepipe ban dating back to last summer.

The latest water supply plans include £14 billion of investment that would create seven new reservoirs, including at Havant Thicket near Portsmouth. Together they would provide an extra two billion litres of water a day, more than the 2.6 billion that the UK’s biggest water firm, Thames Water, provides today.

The Environment Agency asked water companies whether the “basic climate change scenario” would risk their water supply plans or if it might leave the firms “vulnerable to climate change”.

A spokesman for trade group Water UK said: “We strongly oppose the watering down of any plans that will help to safeguard water supplies in a changing climate. Last year’s record-breaking temperatures and the ongoing droughts across Europe are a reminder that investment in water resources must be a priority.”