Families face rocketing bills as government orders water meters to be installed in millions more homes

Ministers say the scheme, announced yesterday, will force households to use less water and reduce the risk of droughts.

But families already reeling from rising fuel, food and council tax bills could be up to £200 a year worse off.

Critics also point out that water companies are losing 750billion litres (165billion gallons) of water every day from leaky pipes - despite making record profits.

The plans are part of a package of measures to improve water quality, prevent droughts and reduce the risk of floods.

To ease pressure on drains and sewers, homeowners will be banned from paving over their gardens without planning permission - unless they use porous material that lets rainwater soak into the ground.

Phosphate chemicals in washing powders that make clothes brighter should also be removed to cut pollution, the Government said. Water meters will be introduced in parts of England at risk of drought by 2030 at the latest.

These include most of the South and East and parts of the Midlands. But water firms will be encouraged to bring in meters much sooner.

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Single people and pensioners would benefit most from a switch to water meters. A single person living in a medium-sized house in East Anglia currently pays around £190 a year for water, according to the regulator Ofwat.

On a meter, the typical bill would be around £88.

But families - particularly those with teenagers or more than two children - would see their bills soar.

A family of five living in the same medium-sized house would face an increase to £335 a year.

The Government pledged to soften the blow by reviewing water charging and introducing tariffs to help large families and the elderly.

Environment Secretary Hilary Benn claimed the scheme is essential to tackle the threat of summer droughts and winter flooding caused by climate change.

But Steve Webb, the Liberal Democrat environment spokesman, said: "This announcement is missing a commitment to get tough with water companies over the huge number of leaks in their pipes.

"We have all seen evidence of leaking water pipes in our streets. It is crazy to see water that has been expensively processed and purified simply spurting out of broken pipes and running away.

"The Government must put more pressure on these companies to tackle their leakage rates. Otherwise this strategy will be a total failure."

Dame Yve Buckland, chairman of the Consumer Council for Water, said: "We understand why the Government is proposing an expansion of metering in areas of water stress.

"However, there are only very limited safety nets in place for those already struggling to pay their water bills.

"We are particularly concerned about the impact of an expansion of metering on low-income

families."

Ofwat supported the plans for meters while the Environment Agency called for "a far greater level of urgency" in introducing them.

The Water Strategy also calls for a cut in the amount of water used by homes by 20 per cent - from 150 litres (33 gallons) per person each day to 130 litres (29 gallons) by 2030.