Acting Deputy Secretary for Works Ian Peterson said precise increases still had to be worked out and the final figures would depend on operating costs.

'These rates of increases are for indicative purposes only. They include allowances for inflation. The exact rates depend on the performance of the sewage services trading fund, budgets and inflation rates,' he said.

Deputy Secretary for Planning, Environment and Lands Tony Cooper said people should look at actual costs rather than percentage increases.

'The charges are very small in dollars and cents,' he said.

The Federation of Hong Kong Restaurant Owners said the charges would be the death knell for restaurant owners already reeling from a huge jump in rent, rates, labour and material costs.

'This is a fatal blow to the restaurant business and will make restaurants less capable of surviving in the market,' said the federation's vice-president, Leung Koon-yat.

He said many restaurants would go out of business because of the increase in production costs.

Association of Restaurant Managers spokesman Tommy Cheung Yue-yan criticised the move for causing businesses additional hardship.

The association, with more than 1,000 members, will ask for a meeting with Chief Secretary Anson Chan Fang On-sang.

But Mr Peterson rejected these complaints and said sewage charges made up just 0.1 per cent of a restaurant's operating costs.

From the $1.38 increase in August, the Government expects charges to increase to $1.86 per cubic metre from next April, $2.52 from April 1998 and $3.22 in April 1999. The increases coincide with completion of the initial phase of the $20 billion strategic sewage disposal scheme.

The Democratic Party and the Association for Democracy and People's Livelihood have expressed opposition to the rise.

Democrat legislator Albert Chan Wai-yip said: 'We support the polluter-pays principle. But we have some reservations and objections regarding the charging rate.'