North west water company United Utilities appears to have misreported its sewage pollution and received a £5 million bonus for meeting environmental targets, an investigation has revealed.

BBC Panorama said it has leaked documents suggesting that more than 60 cases were wrongly downgraded to the lowest level, meaning they are not counted as pollution incidents in the official figures.

These incidents are often sewage discharges caused by blockages or equipment failure which can kill wildlife and endanger human health.

United Utilities was rated as a top performer in the regulator Ofwat’s performance review this year, recording just 126 pollution incidents, or 16 per 10,000 kilometres (6,213 miles) of sewer.

Ofwat records incidents rated category 1-3 but not those in category 4, which means there was no environmental harm.

It rewarded United Utilities with a £5.1 million bonus which the company will take from its seven million customers in north-west England next year.

The BBC spoke to insiders at the company and the Environment Agency who said United Utilities has been misreporting sewage pollution that should have been in the more serious categories 1-3 but were classified as category 4.

One worker for United Utilities said the company only acts on the environment when it is forced to and that its priorities are protecting its reputation and making money.

United Utilities denies any wrongdoing.

In a statement, the company said: “Panorama has made a series of allegations about United Utilities, which we strongly reject.

“Pollution incidents are investigated and action taken where necessary.

“The Environment Agency, as the regulator, determines both the initial and final categorisation of pollution incidents.

“We care passionately about the environment and the communities we serve and have just proposed an ambitious £13.7 billion investment plan – the biggest for over 100 years – to improve services for customers, communities and the environment here in the North West.”

Pollution incident reports are signed off by the Environment Agency, whose officers have visited just six of the 931 reported pollution incidents in the last three years, the BBC said.

Whistleblowers told its reporters that the agency routinely fails to independently check pollution incidents, with the investigation’s full findings aired on BBC Panorama’s The Water Pollution Cover-up at 8pm on Monday.

An Environment Agency spokesperson said: “We take our responsibility to protect the environment very seriously and will always pursue and prosecute companies that are deliberately obstructive or misleading.

“We assess and record every incident report we receive – between 70,000 and 100,000 a year.

“We respond to every incident and attend those where there is a significant risk – including every category 1 or 2 incident in the North West since 2016.

“In the last six years we have pursued four successful criminal prosecutions against United Utilities and required the company to pay millions to environmental charities to put right the cause and effects of their offending.”

The more than 60 cases, which were all signed off by the Environment Agency, include a sewage discharge into the middle of Lake Windermere, a world heritage site in the Lake District.

Sewage was pumped there for more than three hours in June 2022 and was initially thought to be a category 2 incident, but was downgraded to category 4 by United Utilities.

The company initially denied it had dumped sewage into the middle of the lake until the BBC obtained its own documents proving it had.

The Liberal Democrats have called for a criminal investigation to be opened based on the BBC’s findings, while Labour’s shadow environment secretary Steve Reed said the Government has been ignoring this “corruption”.

“This Conservative Government has wilfully turned a blind eye to corruption at the heart of the water industry,” he said.

“Labour will strengthen regulation to make sure every single water outlet is monitored so we know the true extent of this sewage crisis.

“Water bosses who continue to oversee law-breaking on the scale now becoming apparent will face criminal charges, and we will give the water regulator powers to block the payment of any bonuses until water bosses have cleaned up their filth.”

The Environment Agency said it is conducting the largest-ever criminal investigation into water companies in England over sewage pollution.

A Defra spokesperson said: “The volume of sewage being discharged into our waters is utterly unacceptable and that’s why our Plan for Water is delivering more investment, stronger regulation and tougher enforcement to tackle pollution and clean up our water.

“This Government is the first to take such comprehensive action on storm overflows with monitoring up from just 7% in 2010 to 91% in 2022 and 100% expected by the end of the year.

“This means regulators will have additional tools to hold polluters to account like never before, including through new uncapped civil penalties covering a wider range of offences.”