One of England’s top-rated water companies is using an accounting trick to artificially inflate its balance sheet by more than a billion pounds, BBC Panorama has discovered.

Severn Trent Water claims that an investment is worth £1.68bn in its accounts, when in reality it has no value to the overall business.

The made-up money makes the company appear more financially robust and helps to support its bumper payouts to shareholders.

Severn Trent denies the accounts are misleading and says Panorama’s allegations are “completely inaccurate”.

The water company – which is regulated by Ofwat – is part of a complex web of companies in the wider Severn Trent plc group.

Read the story on the BBC and watch the Panorama programme here.