FRENCH BUY BRITISH WATER

Sparkling Perrier is not the only kind of water the French are keen on. Within days of the British government putting the country's water industry on sale to the public, French companies began buying large blocks of shares in English water. They now have significant holdings in three of the 10 newly privatized water authorities and wholly own four smaller water companies in England.

The most active French buyer is Lyonnaise des Eaux, which now has 9 percent of Anglian Water, 6 percent of Wessex Water, and 2 percent of Severn Trent - a total investment worth 300 million (US$486 million).

Its rival, Compagnie Generale des Eaux, is also thought to be interested in moving into the British water industry.

Most of France's water industry is privately owned, with considerable French expertise in water management.

The Gallic inroads caught British water managers by surprise. One said: ``We are amazed at the speed with which the French have moved.'' The aggressive Lyonnaise buying program in Britain is directed by Mme. Christine Morin-Postel, a company vice president.

Under Britain's water privatization rules, the government retains a ``golden share'' enabling it to block unwanted takeovers, and there is a 15 percent restriction on shareholdings in each water company.

The newly floated water companies tend to be skeptical about the effectiveness of these rules in the longer term. Nicholas Ridley, the industry secretary, decided not to use the government's golden share to block Ford's recent takeover of Jaguar Cars, and has wondered aloud about the wisdom of trying to block foreign takeovers by wielding a veto.