Ofwat has proposed £168m of fines for three water companies in England because of failings in managing their wastewater.

In what the regulator described as “its biggest ever investigation”, Thames Water was fined £104m, Yorkshire Water £47m and Northumbrian Water £17m.

The penalties relate to their management of wastewater treatment works and wider sewer networks, including their operation of storm overflows. These are designed to release water when the sewerage system is at risk of being overwhelmed, such as during unusually heavy downpours or snowfall, to prevent sewage flooding into people’s homes.

But Ofwat found that all three companies failed to ensure that the discharge of untreated wastewater only occurred in “exceptional circumstances”.

It said the firms had failed to deal with operational issues at their wastewater treatment sites including neglecting to invest in necessary upgrades to major assets where necessary.

Last year, Thames Water was accused of pumping at least 72 billion...