The Environment Agency said on Thursday that top executives of England's water companies should be jailed.
Most of England's water and sewage companies have seen a decline in their performance on pollution.
The agency reported 62 "serious pollution incidents" last year, up from 44 the year before, as their performance on pollution fell to the lowest level in three years.
Southern Water and South West Water received the lowest rating of one star, meaning they need to improve.
Three companies got the highest rating of four stars.
The Environment Agency wants the courts to impose higher fines on companies that cause the most serious accidents. They were less than a chief executive's salary.
The chair of the Environment Agency said that water companies' performance on pollution has hit a new low.
Directors allowed this to happen. It will be too painful for them to continue.
The number and severity of pollution incidents, the self- reporting of these incidents, and the use and disposal methods of sewage sludge are some of the things that are taken into account by theEA.
Christine McGourty, chief executive of Water UK, said that the results show that the industry must do better.
The recent trend of year-on-year improvements was not reflected in the total number of pollution incidents.
She said that tackling this was the industry's top priority and that every company had a plan in place to make that happen.
The performance metrics were tightened by theEA. Multiple companies failed to meet the new higher standards, but most of the water companies deteriorated based on the previous standards.
The Environment Agency is being looked into for how it is doing its job.
The agency is being investigated by the Office for Environmental Protection for possibly failing to regulate the release of sewage
Mark Lloyd, CEO of The Rivers Trust, wondered if the lower ratings reflected a recent increase in scrutiny after years of regulators turning a blind eye.
The current regulatory system needs to be changed.