The government's plans to build 200,000 more homes in the south east of England fail to properly take into account the strain it would put on water supplies, peers warn today.
A report from the Lords science and technology committee warns the £22 billion sustainable communities plan, which will see new homes built in four main areas, did not take the issue of water scarcity into consideration early enough.
Estimates of water demand that have now been produced are dismissed as "wholly unconvincing", while the peers also warn there was not enough consultation with the water industry when the proposals were first drawn up.
The report comes amid mounting concerns about water supplies in the south-east following two dry winters, with hosepipe bans in force and a drought order already implemented by one water firm.
However, housing minister Yvette Cooper rejected the criticism, insisting that it was extra people, not extra homes, that had the real impact on water demand - and many of the people for whom these houses were being built already lived in the area.
The government estimates the 200,000 extra homes across the Thames Gateway, Milton Keynes and the south Midlands, Asford in Kent, and in Essex, will only see water demand increase by 12 million litres per day by 2015 - an increase of 0.1 per cent.
But the Lords committee questions both the figures and the way they were drawn up, saying: "Not only is the methodology flawed, but the findings are produced in such a way that even the minister with responsibility for water issues misinterpreted them.
"The government must be more transparent about the fact that their housing growth plans will have a very significant impact on water use in south-east England, and focus on ensuring that the necessary preparations are made."
However, Ms Cooper hit back, telling BBC Breakfast that the committee's figures were "a bit confused", and insisted there were measures that could be taken to ensure the building of new homes was done responsibly.
"If you get good water conservation measures, you can do that at the same time as building new homes..We need more water companies to conserve water at the same time making sure we have the homes for the future generations," she said.
Today's committee report notes that tougher action must be taken to deal with the "unacceptably high" levels of water leakage, saying that in many cases, the waste is putting off consumers from making their own water efficiency savings.
But it also warns that action must be taken against those who refuse to pay their water bills in the knowledge that legally they cannot be cut off, and suggests they have their water use restricted to two litres a day.
In addition, it calls for the creation of regional boards made up of representatives of the water industries, consumer and environmental groups, to review resource development, leakages and to discuss how to manage demand.