A major housing development should be blocked because underinvestment by Thames Water in the sewage system means it is unable to cope with the pressure of an increased population, the Environment Agency has warned.

Thames Water’s treatment plant in Oxford has been illegally discharging sewage for six years, causing significant risk to the rivers and environment from pollution, the EA has said.

The increased pressure on the sewage infrastructure from 1,450 new houses planned to the north of Oxford would pose an unacceptable risk of pollution into waterways, the agency said in a letter of objection.

It warned it was “not acceptable” for a new housing development to go ahead until Thames Water had carried out the required investment to bring the works within legal limits.

The revelations raise questions about the feasibility of the government’s housebuilding targets across the country with creaking infrastructure unable to handle existing levels of sewage.

Sewage treatment works in many areas are running at over capacity, and potentially illegally dumping sewage into rivers and seas. More than 2,000 treatment works run by several water companies are at the centre of a criminal investigation by the Environment Agency into illegal sewage dumping.

In a letter to the South Oxfordshire district council this month, the agency said the Oxford sewage treatment works, which deals with the waste from more than 200,000 people, has been running illegally in breach of its permit since 2017.

It objected strongly to the new development, which includes a primary school and new road system, saying the pressure on the sewage works would “pose an unacceptable risk of pollution to surface water quality”.

“Oxford Sewage Treatment Works is a site of significant concern” the EA said.

“In November 2021, the Environment Agency inspected Oxford STW, which led to Thames Water being issued with a compliance assessment report. Within this report, some serious and significant permit breaches were identified.

“While the site is noncompliant with its permit, the risk to the environment remains high.”

It went on to say as long ago as 2017 the treatment works was in breach of permit conditions.

Investment promised by Thames Water was supposed to bring the works up to standard by 2025, but the EA said: “This has been delayed by several years. The scheme and deadline are regulatory and legislative commitments, and failure to deliver it on time will potentially lead to further noncompliance at the site.

“It also presents a significant and ongoing risk to the receiving waterbody, particularly from continued and extended periods of storm overflows. Adding additional flows to the STW before this scheme is completed is not acceptable.”

As a result, the agency said it recommended that planning permission be refused.

Ash Smith, of Windrush against Sewage Pollution, welcomed the agency’s tough stance on the housebuilding. He said: “We are shocked and impressed to see the agency’s Thames region taking a long overdue stand against Thames Water polluting illegally for profit at Oxford.

“Is this a change in policy and a step towards sanity or will this outbreak of professionalism be stamped on by government to keep the shareholders happy?”

Thames Water had told the council there were no capacity issues with the treatment works that would impede the development of the 1,450 homes.

Jo Robb, a Green councillor on South Oxfordshire district council, said 5,000 new homes were planned in the area, all of which would connect to the Oxford treatment works, and this raised serious concerns.

“Time after time when there are major planning applications coming forward, Thames Water has consistently failed to identify capacity issues at its sewage treatment works,” she said.

“Now we see, in the strongest objection from the EA, that this treatment works has been operating illegally since 2017. So Thames Water absolutely cannot be trusted to identify capacity problems at its treatment works.”

There were major national implications regarding the need for new housing, Robb said.

“We have tens, possibly hundreds, of thousands of houses planned across the country which are going to be linked to treatment works that are not fit for purpose,” she said.

A Thames Water spokesperson said: “We work closely with developers and planning authorities across our region to ensure water and sewerage infrastructure can support growth, and where upgrades are needed to accommodate new developments, they will happen. We look at each development case by case and where needed will request conditions are added to planning applications, so for example, new homes are not occupied until the necessary upgrades to our infrastructure have taken place.

“We’re finalising plans for a major upgrade at Oxford sewage treatment works, costing more than £130m. This will provide a significant increase in treatment capacity, larger storm tanks and a higher quality of treated effluent going to the river.”