The paper is devoted to the inverse problem of identifying the coeffic
ient in the main term of an elliptic differential equation describing
the filtration of ground water. Experience suggests that the gradient
of the piezometric head, i.e. Darcy's velocity, may have discontinuiti
es and the transmissivity coefficient is a piecewise constant function
. To solve this problem we use a modification of a direct method of Va
inikko. Starting with a weak formulation of the problem, a suitable di
scretization is obtained by the method of least error. If necessary, t
his method can be combined with Tikhonov's regularization. The main di
fficulty consists of generating distributed state observations from me
asurements of the ground-water level. For this step we propose an opti
mized data preparation procedure using additional information such as
knowledge oi the sought parameter values at some points and lower and
upper bounds for the parameter. Numerical tests confirm the expected l
ocal behaviour of the method, i.e. locally sufficiently many measureme
nts provide locally satisfactory results. Two numerical examples, one
with simulated data and the other with real life data, are given.