A charge of half a cent for every litre of domestic water used will see water in Ireland becoming dearer than in most European countries.

It will also quickly establish a “culture of high prices” for the most basic of commodities, it has been warned.

The Commission for Energy Regulation (CER) gave consumers their first look at what the true cost of water will be from next January in a draft price plan published yesterday.

It will see most Irish families paying at least 20 per cent more than the Government claimed less than three months ago.

The annual cost of water for an unmetered household of up to two adults and two children will be €278, if water is being used for both consumption and handling waste – €38 more than an average announced in May by then minister for the environment Phil Hogan.

Under the CER’s draft plan, due to be approved next month, water will cost €176 for a household with one adult and €102 extra for each additional adult.

People with water meters installed will be charged €4.88 for every 1,000 litres of water used, but will have their bills capped at the assessed charges for six months after the meter is installed.

The St Vincent de Paul expressed concern at the high charge per unit and warned it would establish “a culture of high charging which could have serious implications after 2016, recognised as the end of the transitionary period”.

In a submission to the CER, Irish Water said it would need revenue of €2,263 million to cover the costs of providing water and wastewater services for the period from October 1st 2014 to the end of 2016.

The CER is proposing a cut of 8.2 per cent to ensure that only efficient costs are recovered from customers. This cut will result in an allowed revenue for Irish Water of €2,078 million.

When the total costs of providing water services are spread across all households, this results in an average annual cost of €594 for a household with both supply and wastewater services. However, Government funding and free allowances for children will see that fall – at least until 2016.

The CER said if a leak in a home is identified by Irish Water after a metre is installed, the customer’s charges will be capped until the leak is fixed.

Customers with specific medical conditions, which require increased water consumption, will be capped at the assessed charge if they have a meter. Any water consumed above the assessed charge level will be free of charge.

Where water is unfit for human consumption, affected customers will receive a 50 per cent discount on the water supply charge for the duration of the restriction, and a 100 per cent discount if the disruption is longer than three months.

A minimum water charge will apply to non-primary residences.