Regulators and the Government have been accused of having a "chummy relationship" with water firms by the Lib Dems, who uncovered details of the meeting.
The Environment Agency's role is to investigate and punish the companies found to have illegally polluted waterways.
Liberal Democrat environment spokesman Tim Farron said: "This will rightly stink to the public. Government officials shouldn't be accepting a penny from a disgraced industry which pollutes our rivers whilst hiking bills.
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