Neil - To be honest I am not sure what your rights are in the case of Water supplies, but I do feel that you are being given the "proverbial" end of the stick in this matter and also being treated unfairly.
Surely either the builder or the Water aurthority are singly or jointly responsible for the safe connection and accurate metering supply to your property, for my reason as stated above you could get clarification regarding your exact rights in this situation by contacting Ofwat the regulator...they may even take this case up for you on your behalf.
http://www.ofwat.gov.uk/consumerissues/