The owner of South West Water (SWW) has revealed it is paying out about £3.5 million in compensation to customers affected by the parasite outbreak in Devon amid calls for the company to offer more for affected households and businesses.

Pennon boss Susan Davy insisted the group is “100% focused on returning a safe water supply” to people in and around Brixham, adding that normal service has now been restored for 85% of customers.

SWW increased compensation to £215 for customers in recent days as many were still subject to boil water advice after the contamination of supply by cryptosporidium – a waterborne disease which can cause unpleasant symptoms such as diarrhoea and vomiting.

Conservative MP Anthony Mangnall, whose Totnes constituency covers Brixham, has said customers should get a level of compensation they “deserve” following the outbreak.

According to the Government, 16,000 households and businesses in Brixham, supplied by SWW, were initially told on May 15 not to use their tap water for drinking without boiling and cooling it first, while two people have been taken to hospital as a result of the outbreak.

Ms Davy, group chief executive of Pennon, said: “We are 100% focused on returning a safe water supply to the people and businesses in and around Brixham.

“Normal service has returned for 85% of customers but we won’t stop until the local drinking water is returned to the quality all our customers expect and deserve.

“Our absolute priority continues to be the health and safety of our customers, and our operational teams are working tirelessly around the clock to deliver this.”

The comments came as Pennon reported results showing it increased its full-year dividend payout to investors, despite reducing it by £2.4 million after it was handed a record fine for sewage spills.

The firm said the move to reduce the total payout to investors by 0.84p a share to 44.37p showed “we are listening, clearing the way for long-term shareholder value”.

But the payout was still 3.8% higher than the previous year.

“At a time when media, public and regulatory scrutiny is high, it is important we do what is right for all,” insisted Ms Davy.

SWW was fined £2.2 million in April last year for illegal sewage spills spanning four years across Devon and Cornwall.

Pennon’s figures showed pre-tax losses widened to £9.1 million for the year to March 31, against losses of £8.5 million the previous year, as it faced a jump in debt costs

On an underlying basis, pre-tax profits remained flat at £16.8 million.

Its debt pile swelled to £3.5 billion as of the end of March, up from £3 billion a year earlier.