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It said the change was needed to protect wildlife and to "restore sustainable abstraction". Southern Water said it recognised the region was "water-stressed" and would need time to find solutions.
In 2016, a neighbouring farmer lost a Planning Inspectorate appeal, external contesting the Environment Agency's decision not to renew water abstraction licences from the nearby aquifer.
Decades of unsustainable water abstraction coupled with the increasing trend of droughts of late have caused problems for many rivers and wildlife, says the report by the Environment Agency.