Water company chief executives are being summoned to a meeting with Environment Secretary Michael Gove to explain why they have not met leakage targets as the country struggles to cope with the dry summer.
Mr Gove said customers expect a "reliable and resilient water supply" amid low levels in some reservoirs and the introduction by North West supplier United Utilities of a hosepipe ban from August 5.
READ MORE: Everything you need to know about the hosepipe ban
It comes as farmers were also due to meet with Government officials for a "drought summit" to discuss the effect on the country's food supplies of the extensive heatwave that has scorched the UK.
The first half of the summer in the UK has been the driest since 1961 with the weekend's wet weather and storms the first rainfall in weeks.
Mr Gove said that firms "have much more to do to tackle leakage", adding: "That is why I have repeatedly made clear that companies must improve and recently wrote to them to outline my expectations during this period of dry weather.
"Next week I will ask the chief executives of the water companies that have failed to meet their leakage targets to a meeting at Defra to discuss how they are going to address this serious issue and improve their performance."
United Utilities has previously been accused of "wasting" 430 million litres of water every day from leakages.
The GMB union said earlier this month that its research showed that United Utilities was allowing 175 Olympic-sized swimming pools' worth of water to go "down the plughole" every day.
The company said at the time that "reducing leaks is a top priority".
Irrigation water shortages, a lack of fresh forage for animals and growing conditions for cereal crops are among issues that will be discussed at separate talks chaired by National Farmers' Union president Minette Batters.
She will sit down on Wednesday with officials from Defra and a wide array of rural agencies, plus figures from farming charities after a July that has seen England receive just 15% of its long-term average rainfall.
Ms Batters described the situation as "hugely challenging" for all sectors of farming, warning that the thunderstorms and showers some areas are receiving "won't mitigate the many issues farmers are experiencing".
She said: "There could be serious concerns for many farmers if this extended spell of warmer, drier weather continues as the long-range forecast suggests."
Those due to attend the summit alongside Defra include the Environment Agency, Natural England, the Rural Payments Agency (RPA) and farming charities RABI and Farming Community Network, the NFU said.
Last week the Environment Agency said it had responded to 44 "significant" environmental incidents since the end of June, including moorland fires, algal blooms, dry boreholes, low river flows and fish rescues as the hot, dry weather continues to grip.
The last month of dry, hot weather followed the driest June since 1925, the Environment Agency said. It has seen the water level in many reservoirs fall dramatically.
While only one water company is currently planning a hosepipe ban, continued dry weather into the autumn could see a risk of further restrictions and impacts on the environment, the National Drought Group said.
Ms Batters added: "This unprecedented spell of weather really should be a wake-up call for us all. It's a timely reminder that we shouldn't take food production for granted.
"Farming is one of the most affected industries when it comes to managing volatility."