THE CHIEF executive of Anglo-Welsh water regulator Ofwat has pledged to support cross-border competition to supply water in Scotland if it was approved by Holyrood.

Regina Finn, who is in Edinburgh tomorrow to speak at the Turning the Tide: The Future of Scottish Water conference, told the Sunday Herald: "Our view is that you should remove barriers wherever possible. It's a choice for the Scottish parliament, but if it were in favour of it, that would be great."

Finn will tell the conference that England and Wales are keen to learn from Scotland as it prepares to introduce competition for supply of water to business customers for the first time from April 1.

A more limited experiment has been attempted in England and Wales, which saw Ofwat's 28 private water monopolies permitted to compete to supply water to the 2200 largest businesses in the two countries. But it has proved a failure, with not a single customer changing supplier. According to Finn, this was because there were too few potential customers to make it commercially viable to market to them.

"We will work with the Scottish regulator the Water Industry Commission to exchange information and experience," she said.

With Finn and her board keen to eventually see full household competition introduced, she is likely to walk into a minefield at tomorrow's conference.

The future of Scottish Water has become a political hot potato in recent weeks after the SNP appeared to soften its previously hard line against any shift from public ownership.

Stewart Stevenson, the minister for transport, infrastructure and climate change, who is also speaking at the conference, recently said the government would review the organisation's status, while making clear that he was against the Tory proposal of mutualisation. First minister Alex Salmond's spokesman, on the other hand, has said that mutualisation is a possibility, so Stevenson can expect questions clarifying the position.

Finn said: "If you put the safeguard of decent licensing conditions in place, ownership can't damage it."

Stevenson will tell the conference: "Today I would like to start a conversation with you as to what the long-term vision of the industry should consist of. What should customers expect in 25 years' time?"