The number of pollution incidents caused by water companies rose last year to more than 1,900, the Environment Agency said.
While there was a slight reduction in serious pollution cases in 2016, the number of the most damaging incidents which cause significant harm to wildlife or habitats was up to nine, after just four cases last year.
Overall, there were 1,902 cases of pollution by water companies in 2016, up on the low point of 1,742 in 2015 and the first rise since 2012, the annual report by the Environment Agency (EA) showed.
While water companies made good progress in meeting tougher new targets introduced last year, South West Water was significantly below its targets for pollution incidents, the EA said.
The agency said it was introducing special measures for the company until it better protected the environment.
An EA spokesman said: "We expect South West Water to make significant improvements to their environmental performance.
"They have not done enough to reduce pollution incidents and have repeatedly scored badly on this metric compared with other companies."
The report also revealed that water companies were taken to court 10 times in 2016 for environmental offences and fined a record £6.5 million.
All the firms took measures to ensure security of supply, crucial with some water sources lower than normal following the dry winter, except for Thames Water, which failed its targets to curb leaks.
United Utilities, in the north west of England, and Wessex Water were the best performing companies overall.
Dr Toby Willison, executive director of operations for the Environment Agency, said: "Water companies work hard to protect the environment.
"We have set more stringent targets and we are glad to see overall improvements but want to see more effort to avoid pollution incidents.
"While we welcome the good progress being made we will continue to address any failings and will take enforcement action in the most serious cases."
A South West Water spokesman said the company had achieved its best performance in a number of areas but there was more to do.
It increased investment in wastewater infrastructure by 42% to £97.6 million this year, launched a rapid response team for priority sites and introduced extra staff at smaller sewage treatment works.
"We continue to invest and innovate - for example, through using cutting-edge technology to monitor our sewerage network and purchasing a fleet of fully-equipped rapid response vehicles to enable staff to undertake sewer cleansing, surveying and reporting in one visit.
"This will help our response times and management of pollution incidents as we seek to drive numbers down," he said.
Natalie Smith, from environmental charity WWF said pollution caused by water companies was a key reason only a fifth of rivers in England were deemed to be healthy, and that firms must invest in measures to manage whole river catchments.
"We urge the UK Government to announce a long-term plan to ensure our rivers and chalk streams are resilient, healthy and safe for the public to enjoy. This report is further evidence, that the rate of progress is still far too slow."