A method of estimating characteristics of new leaks formed in an isolated section of a water distribution system supplied through a pressure reducing valve. The pressure reducing valve is used to vary the pressure in the isolated section to at least two different pressure settings during a minimum night flow period at which the measured pressure and flow rate into the system are taken at each pressure setting. The leak characteristics are estimated by subtracting an estimated user consumption from the measured flow rate in each instance. The same measurements are repeated one or more days later. The estimated leak characteristics derived on a later date are compared with those derived on an earlier date to establish a difference in the estimated leak characteristics to determine if there is a new leak or leaks in the isolated section.