Charities and private citizens should have the power to take polluting water companies to court because the Environment Agency cannot keep up with the industry’s rule-breaking, the Liberal Democrats have said.

The party is calling for the creation of “citizen regulators” as part of efforts to combat sewage discharges into Britain’s rivers.

Its proposals also include a radical overhaul of the industry, abolishing “flawed” regulator Ofwat and turning water firms into “public benefit companies” which would put the environment before profit.