THE biggest listed water company in the UK is aiming to enter the Scottish business supply market, becoming the fourth big English player to apply for a licence this year.

United Utilities, based in Warrington, supplies water and sewage services to about seven million people and firms in northwest England.

Its application comes on the back of similar moves by Thames Water, Severn Trent and Veolia over the past few months, in a sign the Scottish market to supply water and sewerage to businesses is finally hotting up, four years after private companies were permitted to compete against Scottish Water subsidiary, BusinessStream.

Until this year, deregulation had attracted only a couple of players such as Osprey Water and Aimera, who are thought to have very small market shares. Most of the big utilities felt it was not worth moving into Scotland while there was no free market south of the Border.

This is now set to change . The sudden influx of applicants to Scotland coincides with reforms that are working their way through the UK Parliament that will let water companies compete with each other for business services the length of the country.

Opponents of utility competition and privatisation in Scotland fear these moves will culminate in full open competition in the domestic market. This would complete a process that the Thatcher administration felt was too politically controversial in the 1980s.

United Utilities was formed from the 1995 merger of North West Water and Norweb. Recently tipped as a candidate for a possible £6 billion takeover by sovereign wealth funds or private equity groups, it does not currently trade in Scotland in any capacity.

A spokeswoman said: "It is still very early days in relation to supply competition and at this point we have not announced any plans for operating outside our region. You should certainly not read into this application any specific plans."