The Berlin-based non-governmental organisation found in its latest global corruption report that bribes, graft and other forms of wrongdoing are the main reasons for a "global water crisis" that is speeding the pace of environmental degradation.

The report, released in Berlin and New York on Wednesday, said water sector corruption ranges from petty bribery in water delivery to the looting of irrigation and hydropower funding.

Such corruption -- seen in rich countries as well as poor -- threatens to exacerbate a global food shortage.

"Corruption in the water sector puts the lives and livelihoods of billions of people at risk," the TI report said. "The onset of climate change and the increasing stress on water supply around the world make the fight against corruption in water more urgent than ever."

Huguette Labelle, chair of TI, said it was essential to overcome corruption in the sector.

"Massive new investments in irrigation have been announced worldwide to help counter the food crisis, yet water shortage means food shortage and if corruption in irrigation is not also addressed these efforts will fall short," Labelle said.

Calling its report the first to study the impact of water sector corruption, TI said 1.2 billion people have no guaranteed access to water and 2.6 billion are without proper sanitation.

Irrigated lands help produce 40 percent of the world's food supply but corruption in irrigation is rampant, TI said.

The report said in India corruption adds about 25 percent to irrigation contracts. Elsewhere, graft can increase the cost of connecting households to water networks by up to 30 percent.

"Corruption in drinking water and sanitation emerges at every point along the water delivery chain," it said.

"It drains investment from the sector, increases prices and decreases water supplies. One result is that poor households in Jakarta, Lima, Nairobi or Manila spend more on water than residents of New York, London or Rome."

The report said industrialised nations were not immune to corruption, with bid-rigging and price-fixing seen in water infrastructure projects in Europe and the United States.

"Corruption in the water sector is widespread and makes water undrinkable, inaccessible and unaffordable," TI wrote.

"It is evident in the drilling of rural wells in sub-Saharan Africa, the construction of water treatment facilities in Asia's urban areas, the building of hydroelectric dams in Latin America and the daily misuse of water resources around the world."