Thousands of licences that allow water companies and farmers to take water out of rivers and streams could be reduced or revoked in an attempt to avoid Britain running dry after years of dwindling rainfall and rising temperatures.
An Environment Agency study, the first of its kind for a generation, has found that one in 10 river catchment areas could have problems from too much water being drawn out. The Thames is flowing at less than a third of its usual winter level through parts of south-west London, and across the south 2005 was the third-driest year since records began in 1897. London's long-term average rainfall is lower than that of Istanbul, Rome, Dallas, Sydney or Nairobi.
The results come as yet more evidence emerged that England is suffering a second successive winter drought: national rainfall in January was below half the long-term average and the forecast for February is mostly dry. River and groundwater levels across much of the south are at, or close to, historic lows at a time of year when they should be at their most healthy, said Ian Barker, the agency's head of water resources. Stretches of at least two rivers in the Thames region - the Ash and the Mimram - are dry.
Elliot Morley, the environment minister, told The Observer more reservoirs, water transfers from other regions and possibly desalination would be needed to help the driest areas cope, especially if climate change brings more dry summers and short winters. He is expected to announce in March whether to allow the first water company in Britain to force meters on its customers, a decision likely to lead others to follow suit.
The Environment Agency is two thirds through a comprehensive study of all 119 river catchment areas. So far, in one in 10, the amount of water that can be extracted by water companies and farmers appears to leave too little remaining to sustain a healthy environment for fish, insects, animals and plants. Places that on paper show shortages include many protected areas, including wetlands and precious chalk rivers such as the Itchen and the Test in Hampshire.
On top of this, results from a similar study of nearly 600 of the most ecologically sensitive river sites in Britain show even greater signs of over-extraction. In the past 20 years, average water use per person has risen from 140 to 160 litres a day and this is expected to continue to grow.
The Environment Agency repeated its call for companies to encourage customers to buy more low water-use appliances and increase the use of meters so they pay according to what they use, rather than a flat rate. Currently about one in four households have meters.
Thames Water is installing meters in properties when they change owners, but warns there is evidence that people with meters increase their water use over time, and that fitting them is very costly.