He used an interview on the BBC on Sunday to pave the way for far-reaching reforms, describing the sector as “broken” and its regulator as “clearly failing”.
Reed said voters could hold him accountable if there had not been improvements in water quality come the next election.
But he stopped short of saying whether Ofwat might be axed altogether – something that could be recommended by the Water Commission in its Monday report.
Former Undertones frontman, Feargal Sharkey, a leading campaigner for cleaner waterways, said he feared the report would not be radical enough to solve the problems facing the sector and would turn out to be a disappointing “flat pancake”.
The latest announcement means the water industry will have a consumer watchdog that will serve as a single point of contact for consumers with complaints, bringing it in line with other utilities.
The plan will also see an expanded role for the Consumer Council for Water (CCW), the public body that currently takes on complaints.
The Department for Environment, Food and Rural Affairs (Defra) was unable to put a timescale on the plans for a new ombudsman, but said it would have legal powers to protect customers who are in dispute with their water company.