Households must stop using tap water on their gardens and cars for good as pressure on supplies is worse than ever, the official watchdog has said.
Rachel Fletcher, the head of water services regulator Ofwat, called on the Government to find environmentally appropriate methods instead.
Miss Fletcher said gardens must have water butts so that homeowners can recycle rainwater for outdoor use, and suggested families could also recycle water from baths and showers.
It comes as Britain recovers from a heatwave where record temperatures have been recorded up and down the country.
Ms Fletcher told MPs on the Commons environment committee: "We do as a sector need to think about transferring water from one region to another. And we have got to shift the frontier in the technology we are using in delivering water supplies.
"The idea of using treated drinking quality water to water our gardens and wash our cars in the 21st century just doesn’t seem appropriate. As a regulator, it is something we will push the companies to innovate on.
"We will work with government and other partners to do everything we can to make sure we have secure, affordable and an environmentally friendly approach to delivering future water supplies."
She also warned against building large numbers of new homes in areas the puts pressure on water supplies, particularly in the middle of the country.
The threat of a hosepipe ban has loomed large in recent weeks as supplies became stretched due to a lack of rainfall.
Pressure on supplies was particularly large in areas where firefighters tackled large moorland blazes lasting over a week in the north of England. Utility firms including Severn Trent , United Utilities and Anglian Water have all issued advice on how to cut down on usage, including turning off taps while brushing teeth.
Sir James Bevan, head of the Environment Agency, also said climate change was playing a role in the shortage, and told MPs water leakage targets must be made tougher on companies to ensure there was little waste.
Environment minister Therese Coffey told MPs that ambitious targets would help cut tap water use from the current 140 litres per person, per day, and urged people to cut down their showers to four minutes a day.
Doug Clarke, spokesman for Severn Trent, pleaded with customers to limit the amount they use. He said: "Demand for water is massively up thanks to several weeks of extremely hot weather.
"While we have lots of water available and our reservoir levels are healthy and we’re putting millions of extra litres of water into the system, people are using water as fast as we can treat and pump it into supply."