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By 1900, populations of the industrial towns in North Derbyshire, Sheffield, Nottingham, Derby and Leicester, and with it demands for good supplies of water, had increased so much, it was recognised that the upper Derwent Valley in North Derbyshire would be ideal for water storage to satisfy their growing needs.
The valley was deep and long, surrounded by gritstone edges with narrow points for dam building, and had a high rainfall. Royal Assent for the reservoirs was granted in 1899. The Derwent Valley Water Board was set up and Gothic style dams were built to contain the waters and the first two dams, Howden and Derwent, which were constructed between 1901 and 1916.
Bole Hill Quarry, above Grindleford railway station, was chosen to supply around 1.2 million tons of stone for the reservoir walls and a railway infrastructure was constructed to support the quarrying operation. A village called Birchinlee was constructed in the valley to house the workers, consisting of well ordered corrugated iron homes along with shops, a school and a village hall. The village, known as 'Tin Town', was dismantled on completion of the dams but the old village site can still be seen alongside the Derwent Reservoir just to the north of Fairholmes Visitor Centre.
Construction of the Ladybower Dam started in 1935 and continued throughout the years of World War 2 despite the difficulty of obtaining materials and labour. It involved the flooding of the villages of Derwent and Ashopton despite much controversy. Derwent Church had to undergo exhumation of it's graves for reburial at Bamford. The dam was completed in 1943 but it took 2 years to fill it. The church tower had been left intact and reappeared eerily above the waters in 1947 when the water level was low. The Packhorse Bridge at Derwent was moved stone by stone, and rebuilt at Slippery Stones, at the head of Howden reservoir, since it had a preservation order on it.
In 1943 the Ladybower Dam was used for practice runs by the 617 Dambusters Squadron of Lancaster Bombers.
A Water Act was passed in 1973 and in 1974 the Derwent Valley Water Board's reservoirs and land were transferred to the newly formed Severn Trent Water Authority, the second largest in the country. The Water Act of 1989 privatised the water industry and Severn Trent Water became a private company. The Catchment area for all three dams covers 19,850 hectares providing a total Reservoir capacity of 463692 million litres. A treatment works at Yorkshire bridge opened in 1929 (water filtered, chlorine added and pH corrected), Bamford Stage 1 opened in 1948, Bamford Stage 11 opened in 1967. The water goes to supply 173 million litres to the treatment works, and 450 million litres of untreated water directly to Sheffield, Derbyshire, Leicester, and Nottingham. At the time this was the largest reservoir in Britain.