The water watchdog has told Sky News that plastic pipes used to replace the leaking Victorian network are prone to leaking soon after they are installed.
The revelation comes after industry regulator Ofwat said that replacing all the pipes in England and Wales would cost an estimated £100bn - but leakage levels would only be halved.
" High-density polyethylene (HDPE) pipes can begin to leak not long after they have been installed," an Ofwat spokeswoman confirmed to Sky News Online.
"This is because the same pressures that act on old pipes, still act on new pipes - namely movements in the earth and changes in temperature."
A major upgrade programme across Britain has used the plastic pipes to replace aged Victorian iron pipework in a bid to stem leaks.
But according to the regulator, water companies across England and Wales still leaked more than 2.29 million litres a minute during 2010 and 2011.
"The HDPE pipes may be more resilient, but they will still leak, and they still need to have joints," the spokeswoman said.
"Joints are particular weak spots, and will be prone to weeps and seepages."
The news comes after it was confirmed that nearly 40% of water companies have not been required to reduce their leakage rates - despite the country's worst drought in 25 years.
According to the Ofwat website, the trade-off between leaks and repairs is called the "sustainable economic level of leakage" , which "identifies the level of leakage that gives consumers the best value for money".
Ofwat has said eight out of 21 water companies had been set zero reduction of leaks targets to 2015, even though hosepipe bans have been declared in central and southern England.
The firms include Yorkshire Water , which failed to meet its 2010-11 targets, and as a result was required to spend an additional £33m on leak repairs.
Southern Water had to pay £5m back to customers after missing its latest leak target by 16%, Ofwat said.
Last year Ofwat announced a new "risk-based strategy", partially designed to reduce "onerous and burdensome" data collection of the companies - with a view to performance indicators being self-regulated by the firms.