THE Melbourne Water scandal could be set to intensify, with the authority now admitting it will continue to overcharge millions of consumers for their water until at least early next year.

Amid an outcry over the discovery that households have been mistakenly billed for a desalination plant that is not yet operating, Melbourne Water confirmed last night it intended to keep charging people for the plant anyway.

With the troubled Wonthaggi project not expected to be completed until February, this means the water authority will be overcharging Melburnians for at least eight more months - unless it is ordered to stop doing so.

Melbourne Water says it needs to keep overcharging the public to maintain its financial stability because the extra money has been factored into its latest five-year financial plan.