Two of England’s largest water companies have been singled out by the regulator as “consistently unacceptable” in delivering on environmental targets.

Southern Water, which serves 4.7m people in Kent, Sussex and the Isle of Wight, and South West Water, which serves 1.6m in Devon and Cornwall, are “again the worst for environmental performance”, according to the Environment Agency’s annual report on the sector.

The findings come just days after Southern Water was sentenced to pay a record £90m fine after pleading guilty to 6,971 unpermitted pollution discharges between 2010 and 2015. The judge said the company showed “a shocking and wholesale disregard for the environment . . . for human health, and for the fisheries and other legitimate businesses that depend on the vitality of the coastal waters”.

Although three of the nine water and sewage companies included in the report — Wessex Water, United Utilities and Severn Trent Water — were praised for making improvements, none of them met all of the environmental targets set out by the industry regulator for 2020, the agency said.

Targets included reducing total pollution incidents by at least a third compared with 2012 levels and reporting a minimum of 75 per cent of pollution incidents to the Environmental Agency. Since 2008, the government has relied on water companies to report their own sewage discharges into rivers and seas.

Rebecca Pow, environment minister, said the report made for “extremely disappointing reading”. “Water companies have environmental responsibilities and they must realise them. They have a legal duty to avoid pollution to our rivers and other waterways.”

Just 14 per cent of rivers in England meet the minimum criteria for good or better ecological status, according to the EU Water Framework Directive.

Although “serious” pollution incidents in England declined for the second year in a row, the overall number was the second highest since 2015, the Environment Agency said. Anglian Water and Thames Water accounted for over half of serious pollution incidents.

Earlier this year, Thames Water was also fined £4m and £2.3m for separate sewage outflows.

Another investigation by the Environment Agency is under way that covers pollution incidents by Southern Water after 2015, but it has not yet brought any criminal charges.

Christine McGourty, chief executive of Water UK, the industry lobby group, said companies were spending £5bn on environmental improvements, such as storm overflows and investment in waste water treatment works over the next few years.

“Looking ahead, we need government and regulators to work with the water industry on ensuring rivers get the investment they need to achieve and sustain the best possible water quality,” she said.

Emma Howard Boyd, chair of the Environment Agency, said there “was still a tendency for companies to reach for excuses rather than taking action”.

The GMB union said its recent research showed that the nine privatised water company shareholders jointly made more than £6.8bn in just five years, while 2.4bn litres of water was wasted through leaks every single day in England.

“If water barons won’t funnel their monstrous profits into repairing infrastructure and preventing environmental damage, it’s time to take back the tap and bring water back into public hands,” the GMB said.