HOUSEHOLD water bills will rise significantly in the next four years after Victoria's independent regulator yesterday approved price increases of between 51 and 64 per cent.

The increases come as Water Minister Tim Holding announced that a long-held plan to pipe recycled water to the Latrobe Valley to cool power plants has been axed because the project would add hundreds of dollars a year to the cost of water.

But price rises approved by the Essential Services Commission  starting this July  to supplement the cost of other water saving measures will still add hundred of dollars a year to water bills.

City West Water prices will rise for a typical household using 165 kilolitres of water a year from $568 to $858 in 2012. South East Water customers will go from paying $599 to $894 and Yarra Valley Water prices will increase from $585 to $960 in the same period. The increases will help cover the cost of major water infrastructure such as the Sugarloaf and North-South pipelines, Eastern Treatment Plant upgrade and the Desalination Plant.

The plan to pipe recycled water from the Eastern Treatment Plant to power stations in Gippsland to supplement their use of about 100 billion litres of drinking water a year was a cornerstone of the Government's water policies in the lead-up to the 2006 election.