Plans to allow Yorkshire Water's 4.5 million customers to own the company came under fire at a public meeting organised to gauge public reaction.

In a lively and often heated meeting at the Hotel Metropole in Leeds yesterday, Yorkshire Water customers fired questions at John Napier, the chairman of Kelda, which owns Yorkshire Water.

Mr Napier was invited by Ofwat's Yorkshire Customer Service Committee to explain the proposals to hive off the company's assets - its land, pipeline, and treatment works - to a new, mutual, not-for-profit firm.

He said under the plans it would be this firm, still to be known as Yorkshire Water, which every Yorkshire Water customer could opt to have a share in.

The move would mean millions of pounds in windfall cash will be paid back to Yorkshire Water's 50,000 shareholders - 40,000 of whom are in Yorkshire.

But according to Kelda, profits can be invested in the new company and not paid to shareholders.

The new company would establish operating contracts, initially with Kelda, which would operate its assets on its behalf.

The CSC, which is the local independent water watchdog set up to represent the interests of water and sewerage customers of Yorkshire Water Services and York Waterworks plc, has been consulting customers on the proposals since June and will continue until July 17.

After that shareholders and the water regulator Ofwat would still have to give the scheme their seal of approval before it could go ahead in October.

But David Rees, Ofwat's director of corporate finance and economic affairs, raised a number of issues including the accountability of the new company's board and warned the proposals must safeguard drinking water quality

He questioned what benefits customers would receive and how would they have their say in the matter.

Pete Bowler, campaigns officer for Watch, went further.

He said: "The plan to sell Yorkshire Water's assets back to its customers affects everyone in Yorkshire.

"It is vital that everybody has a proper chance to make an informed comment on the future of the country's water industry."

He called for an extension of the consultation period.

But David Perry, chairman of Yorkshire Water Mutual which would take over the assets, said: "This marks an exciting new phase in our history.

"This region's water assets are part of our heritage.

"They will no longer be owned by anonymous financial institutions or vulnerable to takeover, but instead will belong to the people of Yorkshire."

Copies of the consultation documents can be obtained from Ofwat's Yorkshire Customer Services Committee on 0345 089368 or www.open.gov.uk/ofwat/kelda.html