The Finance Ministry last night shot down Opposition leader Joseph Muscat’s claim that at least 5,000 families had been billed incorrectly for the rent of their water and electricity meters.

However, it admitted that 1,225 clients were wrongly billed.

The ministry strongly denied Dr Muscat’s claims that instructions were given to refund only those clients who spotted the mistake.

The Labour leader made the allegation last Friday night during a televised debate on TVM’s programme Xarabank with Prime Minister Lawrence Gonzi.

He claimed that when the management of Arms Ltd realised what had happened, a decision was taken to only give refunds to those who filed a complaint.

The customers, according to Dr Muscat, were billed double for the rent of their water and electricity meters because they were incorrectly charged non-residential rates.

The Labour leader said this was “institutionalised theft” and that the Prime Minister was aware of what had happened but had done nothing about it.

When contacted, a ministry spokesman said the error was spotted following a complaint made by a client on October 15 that his rental charge was incorrect. Upon analysing the system, the staff realised that a total of 2,119 accounts were found to be incorrect, 1,225 of which had already been billed.

From these bills, 1,185 were domestic or residential while a total of 40 non-residential accounts were charged a domestic rate instead of a commercial rate.

The contractor was notified and the problem amended while the necessary arrangements were made to refund the clients.

While acknowledging the need to improve the service further, the ministry said it had asked for a detailed report from Arms Ltd about the matter.

During the debate, Dr Muscat urged the Prime Minister to agree in parliament to an investigation by the auditor general into the unpopular utility bills contractor.