Baron de Ramsey, John Ailwyn Fellowes, is both chairman of the Environment Agency and director of the family firm, Worlick Farms
Ltd, which the EA is prosecuting for taking too much water from a farm ditch.
He said the firm will be pleading guilty when the case goes to court on Wednesday. The case - described by a senior EA colleague as 'the final embarrassment' - comes as the hereditary peer is about to leave the job early after a controversial tenure.
Environment minister Michael Meacher is shortly to announce the new chairman of the agency. The final choice is between Sir John Harman, leader of Kirklees MBC, and the present deputy chairman Bryan Sanderson, chief executive of BP Amoco Chemicals.