The Oireachtas committee on water charges is set to confirm that only households who use 1.7 times the average amount will face charges.

A draft report from the committee also proposes refunds for any bills which have already been paid, with no mention of the €100 water conservation grant.

70,000 households could face prosecution and fines for wasteful use of water, according to a draft report from the committee. 

Households using 70% more than that limit could face financial penalties, the rate of which will be decided by the regulator.

The latest draft report produced by the Committee confirms that households using less than amount proposed will have water funded through general taxation.

The report also recommends that the Water Services Act 2007 should be amended to provide for this.

Last month, Fine Gael agreed to seek new legal advice on whether a total abolition of charges would be in keeping with European Union rules.

While Fianna Fáil says it accepts the need to curb excessive water use, but insists this can be done under existing laws.

Elsewhere the report proposes mandatory water meters for new dwellings, but that 'district meters' should be used in other areas to identify any leaks in the system.