Every household in Devon and Cornwall is to get £50-a-year off their water bill to make amends for sky-high charges, the Government is to announce tomorrow.

The Western Morning News has learned Chancellor George Osborne will say an annual Treasury rebate to South West Water customers will start from 2013-14.

The handout, to be unveiled in the autumn spending statement, will continue at least until the end of the decade and represents a major victory for the Westcountry.

As 700,000 households will benefit, the rebate represents an annual £35 million taxpayer bail-out and is the most striking of a series of policies the Government has been considering since the Budget in March.

Ministers want to "right the unfairness" that left the region with the country's highest bills following water industry privatisation in the 1980s.

At £517, average annual South West Water bills are £157 higher than the national level, and £101 above the next highest cost region. Many in the Westcountry pay over £1,000 a year.

South West residents pay for the upkeep of 30 per cent of the country's coastline, despite Devon and Cornwall representing just three per cent of the population.

As well as footing a £2 billion infrastructure bill to stop raw sewage being dumped into the sea, Westcountry households also bear the cost of millions of tourists who put extra pressure on the water and sewage system.

A Treasury source told the WMN: "When it comes to their water bills, customers in the South West face greater pressure and higher costs than identical households elsewhere in the UK.

"The previous Government failed to take action for 13 years. In setting its out plans for a rebate, the coalition is taking an important step towards tackling this unfairness."

The coalition Government is keen to take credit for ending more than 20 years of misery that followed the carve-up of the state-owned industry in 1988 under the Conservatives.

Of 18 MPs in Devon and Cornwall, 16 are either Conservative or Liberal Democrat, though Labour argues it commissioned the independent Walker review in 2009 that paved the way for tomorrow's announcement.

When South West Water was privatised many felt it received insufficient funding to upgrade ageing sewage systems. The company had to borrow heavily and in turn pushed bills higher.

Seperate plans to help the poorest households with water charges, which were considered as part of a wider public consultation on water affordability, will be set out in December.

In March's Budget, Mr Osborne took the unexpected step of acknowledging that Devon and Cornwall suffers from "unusually high" bills, and that money would be set aside for relief payments.

Tomorrow's statement to the Commons will be seen as making good on that pledge.

Since the Budget, a six-week public consultation outlined measures ministers were considering, with a bail-out package of up to £40 million the most eye-catching proposal.

MPs from all parties, past and present, have lobbied for Government intervention. WMN readers were among more than 1,500 people that signed a petition submitted to Parliament in the summer calling for "fair and affordable" water charges.

On visits to the region, both Mr Osborne, a Tory minister, and Danny Alexander, the Lib Dem Chief Secretary to the Treasury, have been anxious to stress the coalition wants to tackle the problem, which is made worse by Westcountry low wages.

As previously revealed by the WMN, the rebate will require primary legislation and will feature in next May's Queen's Speech, which outlines legislation for the forthcoming Parliament.