Severn Trent Water has been fined £2 million at the Old Bailey for lying about water leaks.
Britain's second-biggest water company, with eight million consumers, had faced an unlimited fine.
The Serious Fraud Office, which prosecuted the case, had reportedly hoped for a fine in the region of £70 million in line with the level of fines levied by water regulator Ofwat.
Judge Jeremy Roberts was asked to make an example of the utility provider to deter others. But he had to comply with criminal court precedents for fines, particularly comparing them to health and safety offences which involved loss of life.
Last year, such fines included £175,000 for the shooting of Jean Charles de Menezes by the Metropolitan Police and £4 million against Network Rail following the Paddington train crash in which 31 people were killed.
Severn Trent Water, which covers an area from the Bristol Channel to the Midlands, was the first company prosecuted for making false statements about its leaks.
The firm agreed to pay the £200,000 costs of the Serious Fraud Office in bringing the case. It pleaded guilty to two offences under the Water Industry Act of making false returns to Ofwat concerning 2001 and 2002.
The lying came to light from emails and board meeting minutes. The court was told the company reported an estimated yearly water loss of 340 million litres per day to meet targets, while the true figure was around 514 million litres.
This was to stave off having to carry out millions of pounds-worth of repairs until they could be covered by future water bills, and to avoid bad publicity. The firm had an operating profit of between £308 million and £318 million at the time and shareholders benefited from the lies.
Edmund Wilson QC, defending, said three directors who denied criminal behaviour, and other senior staff, had left the company. He promised that consumers would not be saddled with higher bills to pay for the fine and court costs.
