A Devon MP has said the regional water supplier’s response to a waterborne parasite outbreak has been “contemptible and just generally incompetent” as he called for them to be “on the line” to help compensate local businesses.

About 16,000 households and businesses in the Brixham area of Devon, supplied by South West Water (SWW), have been told not to use their tap water for drinking without boiling and cooling it first.

The UK Health Security Agency (UKHSA) said on Friday that 46 cases of cryptosporidium, a disease which can cause unpleasant symptoms such as diarrhoea and vomiting, had been confirmed in the town and that more cases were anticipated.

Conservative MP Anthony Mangnall, whose Totnes constituency includes Brixham, said SWW’s response to the parasite outbreak in the seaside town had been inadequate.

He told the PA news agency on Saturday: “The predominant failure is the fact that earlier in the week, South West Water was asked whether or not this was to do with their network and they categorically ruled it out, only for them to change their position 24 hours later, which I think is contemptible and just generally incompetent – and it’s put a lot of people’s health at risk.”

Mr Mangnall said SWW had failed to “safeguard public health” and would “be absolutely on the line” to compensate local businesses which have lost money because of the outbreak.

The MP said he would be raising the matter in the House of Commons and with the area’s local authorities but was “absolutely determined not to jump the gun on this”.

He added: “I want to make sure that before we get to the sentence, we know the verdict – that to me is really important.”

Mr Mangnall had earlier told LBC News that “heads are going to roll” over the handling of the outbreak.

SWW issued a “boil water notice” for Alston and the Hillhead area of Brixham after water tests showed “small traces” of the parasite.

It said on Saturday a water tank at Hillhead reservoir – where infected water had been detected – had been drained overnight.

David Harris, drought and resilience director at the water company, said: “Over the past four days, we have been working tirelessly to identify and resolve this issue. We are deeply sorry for the impact this disruption is having on daily lives.

“As part of our ongoing investigation, a damaged valve on private land has been identified as the possible cause, which has since been isolated from the network and repaired.

“As you would expect, we are urgently investigating how this happened, while working to rule out any other possible sources of contamination elsewhere in the network.”

Dr Lincoln Sargeant, Torbay’s director of public health, told BBC Radio 4’s Today Programme the initial contamination has been “more or less dealt with” but delays in symptoms developing may cause the number of cases to increase for “up to two weeks”.

Shadow environment secretary Steve Reed called on the Government to “put water companies under special measures” following the outbreak.

He said: “Despite warnings, the Conservatives just folded their arms and looked the other way while water companies pumped a tidal wave of raw sewage into our rivers, lakes and seas – putting lives at risk.

“The Government must urgently adopt Labour’s plan to put the water companies under special measures to clean up water.

“The next Labour government will strengthen regulation so law-breaking water bosses face criminal charges, and give the regulator new powers to block the payment of any bonuses until water bosses have cleaned up their filth.

“With Labour, the polluter – not the public – will pay.”

Business owners in Brixham have complained about the lack of contact from SWW.

Sally Dart, who runs homewares shop Flotsam 50 near Brixham Harbour, told the PA news agency business was “probably 30 to 40% down” and described the water company as “appalling”.

Ms Dart said locals first felt symptoms after a busy, pirate festival held in the town between May 4 and 6.

Referring to SWW, she added: “They knew they had this problem – obviously the reservoir couldn’t cope for some reason or another, it was getting all the stuff off the field into it.

“No one was checking the quality of the water and we’ve all got sick and it’s stupid, really.”

Residents are being urged to boil water and let it cool before drinking it, preparing or cooking food or cleaning their teeth, although the company said water can continue to be used as normal for washing, bathing and flushing the toilet.

The disease can be picked up directly from the faeces of another person or animal, from swimming in or drinking contaminated water, or by eating contaminated food such as unwashed vegetables.