The Environment Agency is introducing special measures for South West Water until it better protects the environment.
It comes after the firm came significantly below its targets for pollution incidents, the EA said.
The supplier must improve its performance according to a “Water and sewerage companies’ performance” report.
The EA says that last year the company was responsible for 115 major pollution incidents (including serious sewage leaks) – the next highest number from a supplier was 46.
The agency has ranked South West Water’s performance as significantly below target.
The Environment Agency also gave the company a two-star rating, meaning that it requires improvement.
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.”
South West Water said: “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.”