The Energy Regulator has issued proposals on water charges that would see households paying just under a quarter of a cent per litre of water.

The regulator also proposes a charge for households without a septic tank, of just under half a cent per litre, for water and waste water.

In May, the Government announced that the average charge for a household with 2.7 people would be €240 a year based on water usage of 140,000 litres a year, 30,000 litres of which would be free.

This was subject to the decision by the Energy Regulator who today issued its draft proposals.

It proposes that the average bill will be €238 a year but it is based on households using less water.

It has agreed that there will be no standing charge and that the free allowance be maintained at 30,000 litres a year per household.

However, the Regulator has reduced the additional free allowance per child from 38,000 litres a year to 21,000 based on new research on consumption levels.

For households that are not metered an assessed charge will apply.

For those with meters, their bills will be capped at the assessed charges for six months from the meters being installed.

This will result in a water charge of €88 for a household with a single adult, up to €292 for a household with five adults.

Where households do not have a septic tank a combined assessed water and waste water charge of €176 will apply for a single household and €584 for a five-adult home.

The Regulator also disallowed just over 8% of costs that Irish Water had estimated to provide the service, which would have resulted in higher costs.

Dr Edgar Morganroth, Associate Research Professor, ESRI has said that early estimates indicate that more than half of customers will pay less than the average water charge.

He told RTÉ that these estimates are based on readings from water meters that have already been installed and will have to be revisited at at later stage.

Dr Morganrath said the early indications also suggest children use less water than what was originally estimated.

Meanwhile, Fianna Fáil's Barry Cowen has accused the Government of doing a flip-flop in relation to water charges.

He said the real cost will not be known until the bill comes in the door.

Sinn Féin's Brian Stanley said there would be no cheap water or small bills from today's announcement.

He told RTE's News At One that what has been announced today is not what people had been expecting or in line with what has been said by the Taoiseach in the Dáil.