Charlie wrote:
OK, I rang Three Valleys Water again and they say that the meter was
"Compulsory Fit" when the tenants moved in.

And that under the Water Industry Act 1991 Section 114b, Subsection 2b
they are entitled to do this.

I checked this act at: http://tinyurl.com/oksun

But couldn't see anything under section 114 that seemed relevant.

I'm not feeling very confident about this anymore :-(

I think you've got the wrong section there, and in any case, the Act
has been extensively amended.

You need section 144A as inserted by the Water Industry Act 1999.

http://www.opsi.gov.uk/acts/acts1999/19990009.htm#6

Email me if you have questions.

Sairey