England's leakiest supplier has been fined £24,000 for giving its customers dirty water.

Thames Water admitted two counts of supplying water unfit for human consumption, contrary to the Water Industry Act 1991.

Magistrates in Reading, Berkshire, were told residents of Spencer's Wood and Shinfield, south of the town, received brown and orange-coloured water in May 2004.

Thirty-eight complaints were made, leading to the prosecution by the Government's Drinking Water Inspectorate.

Although the water posed no health risks, the fact it was dirty meant the DWI deemed it unfit, the court heard.

Apologising to the 2,300 customers possibly affected, Maurice Sheridan, for Thames Water, told the court the discoloration was caused by iron sediment disturbed by an increased flow in the pipes.

A £12,000 fine was imposed for each offence and Thames Water was ordered to pay an additional £7,800 court costs.

A spokeswoman said afterwards that the pipes have since been improved and that there has been no repeat of the 2004 incidents.

"We regret this incident and the inconvenience caused to our customers," she added.

According to the UK's water watchdog Ofwat, Thames Water, which also supplies Swindon, is the UK's leakiest supplier, losing 198 million gallons daily from its antiquated pipes.