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The proposal, developed by the Water Saving Group (a minister-led group which includes water companies, regulators and interest groups), adds metering to the existing raft of options for companies - alongside developing new resources - for ensuring long term security of supply. Today's move follows consultation with companies, regulators, charities and members of the public. The Environment Agency is publishing its response to a parallel consultation on defining areas of water stress today.

Phil Woolas said:
"The terrible flooding we have seen recently came after more than two years of severe drought in some parts of the country. As the impacts of climate change on our weather and rainfall patterns increase, we have to face up to the fact that what we might now consider to be extremes could become more commonplace. We need a flexible range of tools at our disposal if we are to manage supplies sustainably in the future.

"Metering saves water - around 10% per household - and it seems right to me that in seriously water-stressed areas the costs and benefits of compulsory metering are given consideration alongside other options.

"This is not a green light for universal metering, and it in no way absolves companies from their responsibility to deliver on leakage targets. Water companies will have to make a strong case in their 25 year forward plans for compulsory metering in their region to get approval to go ahead, demonstrating that metering offers the best value for water customers' money compared with the other options available, such as building new reservoirs. They will have to take into account the impacts on individual customers and particularly on vulnerable households. Their draft plans will be open to public consultation, so everyone in an affected area will have the chance to make their views known".

Dame Yve Buckland, Chair of the Consumer Council for Water, said:
"We support the Government's view that metering is essential in water stressed areas, but have argued consistently that compulsory metering will make it difficult for low income, larger households to afford their water bills - and there is currently no credible support system to help them."

"Concerns about metering can only be addressed when a comprehensive support mechanism is in place. Water companies should pilot new tariffs, where feasible, to demonstrate how effective they might be once metering becomes more widespread, but Government also has an important role in creating a framework for such support.

"Metering is not the complete answer to driving down water use, but it can work together with increased customer awareness and more specific actions such as the use of water efficient appliances."

Inclusion of metering in long term management plans will come into effect after the price review 2009.

Household Consumption
Households use almost 70% of the billed water supplied by companies in England and Wales, with the rest used by the business and public sectors.

Average per capita consumption in England and Wales in 2005/06 was approximately 150 litres per person per day. Total household demand has been increasing for some years and this increase is expected to continue. The predicted increase in demand is a result both of projections of increases in per capita consumption and expected increases in numbers of households.