The retail water market for businesses in England officially opens today.

That means more than 1.2 million eligible businesses, charities and public sector organisations will, for the first time, be able to choose who they pay for their retail water and wastewater services in the country.

The new market will become the biggest of its kind in the world. Scotland is the only other country with a competitive water market for businesses.

Ofwat will regulate the it and Market Operator Services Limited (MOSL) will operate the market on behalf of its water company members to ensure there is a smooth transition for customers.

Environment Secretary Andrea Leadsom welcomed the launch of the market, which is expected to deliver up to £200 million of benefits to the economy and water customers in the next 30 years.

Ms Leadsom said: “Over a million businesses, charities and public sector organisations will now be able to find the water deal that works best for them. Opening the market is an historic milestone, paving the way for innovation and efficiency and giving customers the same choice over their water retailer as they currently have for their energy and other essential services.”

Ofwat adds it is the single biggest change to the water sector since privatisation.

Chief Executive Cathryn Ross said: “Business customers have been crying out for choice over their provider of water and wastewater services for years.

“I am hugely optimistic about the changes that lay ahead and the benefits they will bring to customers. But it is important that we at Ofwat maintain effective oversight of how the new market is working and what customers are experiencing. This will mean that we can step in if we need to, to make sure customers are protected.”

Crown Commercial Service expects to help public sector organisations save more than £20 million over four years on water bills.

• Defra, England, MOSL, Ofwat, UK, water bills, water market