The firm pled guilty at Dunfermline Sheriff Court yesterday to polluting Lyne Burn at Crossgates in Fife.
Scottish Environment Protection Agency officials found the burn stinking of sewage and coloured dark grey after the spill from the Humbug Park pumping station.
Contaminants in the burn tested at 20 times the level at which the water quality would have been classed as “poor”.
Agency ecologists discovered dead wildlife a mile downstream of the spill.
Investigating officer Carla Ward said: “Following a previous incident the overflow at the pumping station had been blocked off, but it was ineffective as a long-term solution.
“An automated remote monitoring system which sends electronic information back to a control centre was in place at the site, but had not been working for three months. This system should have alerted Scottish Water to the problem, as they would have realised neither pump was working.”
She said the incident was reported to the procurator fiscal as a serious breach of regulations.