PepsiCo Incorporated has decided to be transparent about the fact that its Aquafina bottled water product is made from tap water.

The move is widely seen as a compromise to demands from environmental advocates and political opponents who are growing increasingly critical of the industry.

Corporate Accountability International, a consumer advocate group that claims to "challenge irresponsible and dangerous corporate actions around the world," has been pushing the major water bottlers to end what it calls misleading practices.

"After months of intensive campaign activity, Pepsi has agreed to provide consumers with more information about the source of the water used for Aquafina," says a press release from the group's website.

"In direct response to a national day of action yesterday, Pepsi agreed to spell out 'Public Water Source' on the Aquafina label."

Through its Think Outside the Bottle Campaign, the group has objected to the fact that Aquafina labels feature an image of snow-capped mountains with the words "pure water, perfect taste," suggesting the source is a mountain spring, when in fact it is purified municipal water.

In fact, the group claims 40 per cent of bottled water uses tap water as its source.

"Pepsi's response to the Think Outside the Bottle campaign is an important first step," said campaign director Gigi Kellett in the statement.

"Concerns about the bottled water industry, and increasing corporate control of water, are growing across the country. It is significant that Pepsi is taking some action, especially since Aquafina is the leading bottled water brand in the U.S."

Pepsi's Aquafina and beverage industry leader Coca-Cola's Dasani are both made by purifying water that comes from public reservoirs. By comparison, Danone's Evian and Nestle's Poland Spring brands are labelled as "spring waters" and are tapped from locations said to have especially pure water.

Amid concerns about the quality of bottled waters, Coke told Reuters News Service it would begin posting information online about the results of quality control testing it performs on its Dasani product by as early as late summer.

Kellett, whose campaign encourages people to drink tap water, said Coke's move also shows that progress is being made.

"Concerns about the bottled-water industry, and increasing corporate control of water, are growing across the country," Kellett said.

Bottled water has grown as a source of revenue for major beverage companies, while sales of traditional carbonated beverages have slipped amid growing health concerns and weakened demand.

PepsiCo is based in Purchase, N.Y. while Coca-Cola is based in Atlanta.