In addition, United Utilities has a £1.5 billion contract to operate these assets and manage the capital expenditure programme which runs through to 2015, with the potential to extend the contract for a further five years to 2020.

Chief executive of United Utilities, Philip Green, said:

“We are very pleased to announce the sale of our electricity distribution assets for a substantial premium to the regulatory asset value.  This meets our target of agreeing the sale by the end of this calendar year and is consistent with our view that shareholders’ interests are best served by our focusing on the much larger water asset base.”

Completion of the sale is expected by 31 December 2007.