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Yorkshire Water says the plant installed by Taylor Woodrow's northern construction division at a treatment works in Knostrop, near Leeds, was unreliable, unable to process loads and broke down regularly.

The writ, which claims damages of £9.8m, says Taylor Woodrow refused to carry out remedial work after it was told of defects.

The plant was commissioned in 1999 and tests carried out at the time showed problems. The writ claims that although the project manager gave Taywood notice of defects, it would not carry out the necessary work on the plant. As such, it has been impossible to carry out performance tests because of the firm's lack of co-operation.

The writ also notes that since Yorkshire Water took over the plant, the Environment Agency has found sampled water to be of unacceptably low quality. Yorkshire Water has therefore been compelled to operate the plant at well below its design requirements because of the risk of breaching Environment Agency regulations.

The company says Taylor Woodrow is responsible for this because the plant it installed was defective. It claims the plant does not comply with performance requirements, that it is incapable of treating the maximum design flow and is unsuitable for its purpose.

For example, contingency measures are needed to divert some of the effluent manually, and the flow has to be reduced in the winter.

In addition, the writ claims that more staff will be needed to run the plant than is normally required at other UK plants because of problems associated with the defective work.

The writ says remedial work is likely to cost more than £7.8m and that an extra £2m must be added to that sum to take into account exceptional operating costs.

The 35-page writ was issued by solicitor Berwin Leighton Paisner.

Taywood said it would not comment because the matter was now before the courts. The firm is expected to defend the writ.