HOPES of a government U-turn to save churches and sports clubs from huge hikes in water bills – the so-called "rain tax" – have been dashed.

Ministers have ruled out exempting places of worship and non-profit making groups from the higher charges – despite promising a review just two months ago.

The Diocese of Liverpool last night said it was "deeply disappointed" by the decision.

It paves the way for Warrington-based United Utilities (UU) to switch back to the new charges – according to the size of the land occupied, rather than rateable value – next year.

An angry backlash against sky-high bills had forced the company to revert to the old charging system from April, but only for 12 months.

Moreover, sports clubs must apply to go back to the old, cheaper system – proving they are registered as a Community Amateur Sports Club (CASC) – or two-thirds of their 2009-10 bill will be according to land occupied.

The Diocese of Liverpool led the protests against the "rain tax", after annual water bills soared from just £5,000 to £70,000 at big cathedrals. Larger churches are paying £8,000 instead of £140.

Meanwhile, the Scouts Association estimated the total drain "from the pockets of children into the pockets of water companies" to be around £1.5m annually. In April, Environment Secretary Hilary Benn attacked large increases in bills, and pledged he was "keeping the issue under close review".

A few weeks later, Weaver Vale MP Mike Hall introduced a backbench Bill to exempt "places of worship, non- profit making sports clubs, scout groups and guide associations" from the higher charges.

But now, in a letter sent to all North West MPs, Mr Benn's department has ruled out any exemptions, insisting there is nothing wrong with the "principle behind the switch to site area charging".