Athlone, Dublin, Galway and Letterkenny will experience water supply shortages within the next five years, unless additional investment is forthcoming.

Forfás, the enterprise and science advisory board, has warned of waste water treatment shortages in these areas by 2013, with similar predictions for Mallow and Wexford.

In a report released today, Forfás found around 43% of the total volume of treated drinking water produced in Ireland's main cities and towns is lost before it reaches the consumer.

The agency maintains local authorities need to clearly explain how they calculate water and waste water bills for business.

Forfás has also called for the cost of providing water to domestic users to be identified and the current EU derogation on domestic water charges re-assessed.