Meters could add £200 to the family water bill under Labour's plan to fit one in every home

The Government is to make it compulsory for water firms to install meters so that the country can better cope with droughts.

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Ministers say the measure could reduce households' water use by 10 per cent.

They also claim the average household water bill - currently £162 - would fall.

Single people and pensioners would benefit most because, typically, they use less water.

For instance, an elderly person living alone in the Thames Water region - London and the South-East - would pay £83.51 with a meter against the current average bill of £172.

But critics warn metering would hit families with children the hardest, because they flush toilets and use showers and household appliances such as washing machines the most.

For instance, a family of five living in the Thames Water area could end up paying £291.79 a year compared to the current average of £172.

In areas covered by Wessex Water, a family of five could pay £417.28 a year against an average bill of £201 now.

In addition, there are fears that the cost of installing the meters, which is likely to total more than £1.3billion, will be passed on to householders.

Despite the widespread flooding over the summer, ministers claim the country is likely to see more droughts in future years.

They say it is vital to reduce the 33 gallons (150 litres) of water used by a typical Briton every day.

Ministers hope that making it compulsory for water companies to install meters from 2010 will help cut water usage by up to a third.

At the moment about 30 per cent of Britain's 26 million homes have a meter.

But the figure is increasing by around 2 per cent a year.

Climate Change Minister Phil Woolas, who is drawing up the Government's water strategy, said: "The case for universal metering is now overwhelming - provided there is protection for low income and large families."

Labour, which argued vociferously against compulsory metering in opposition, believes meters should also help consumers spot leaks, as sudden rises in the amount of water used will be more obvious.

But industry watchdogs argue water firms should be forced to fix leaky pipes before expecting customers to use less.

Figures show water companies are wasting 750 million gallons (3.42billion litres) a day through leaks from cracked pipes.

Many homes are already facing inflation-busting increases in water bills for at least the next decade as firms raise money to replace ageing pipes and sewers.

In some parts of the country, customers have been told to expect bills to rise by up to six times the rate of inflation, despite enduring the inconvenience of hosepipe bans.

Chris Huhne, the Liberal Democrat environment spokesman, said introducing meters in areas where water was not scarce was a 'complete red herring'.

He added: "There is absolutely no point introducing water meters in areas where there are plentiful supplies of water, such as in the North-East.

"Where they are necessary is in areas where there is clearly a shortage of water and it is a serious problem.

"Most evidence suggests water meters can help reduce water use by at least 10 per cent.

"But water companies must not introduce water meters to reduce usage at the expense of cutting the amazing amounts of water wasted from leaking pipes and sewers."

Peter Ainsworth, the Conservative environment spokesman, said: "This is a massive U-turn by Labour, who campaigned against compulsory water meters.

"But we welcome it provided the billing system is reformed to ensure that low income families are protected against rocketing bills."

The water industry welcomed the plan yesterday.

A spokesman for Thames Water said: "We believe metering is the fairest way of charging as it directly links consumption to cost."