Parts of southern England are facing a "serious situation" regarding water shortages, according to the Environment Agency.
Millions of homes are already subject to water restrictions
The agency is calling on water companies in affected areas to take immediate action to conserve precious supplies.
But why are millions of people's water supplies at risk over the summer months?
Which areas are affected?
The drought is most severe in south-east England, with millions of homes subject to water restrictions such as hose pipe bans.
However, most of England and Wales has had a dry winter. Only northern England has had rainfall that approached average levels.
How much water do we use each day?
Each person in the UK, on average, uses 150 litres of water each day. People in the Midlands are most efficient, consuming 139 litres. Londoners are the most wasteful, using an average of 170 litres each day.
What is a drought?
Although the answer seems obvious, droughts are complex and are hard to define because they can vary in length and impact.
In 1990, parts of the UK experienced a short drought because of a hot and dry spring and summer resulting in higher demand for water.
The 1976 drought, seen as a benchmark by many experts, was the result of a dry summer and winter in 1975, which was then followed by another dry summer in 1976.
The current shortage is the result of two consecutive dry winters that have led to reservoirs and aquifers not being replenished.
The Environment Agency warns that a hot summer could result in one of the most severe droughts in the past 100 years.
Why is there such concern when many reservoirs look full?
Recent rainfall has helped replenish surface water sites, and many reservoirs across south-east England are close to full.
Groundwater is the largest available supply of fresh water
The water is held in layers of porous rock known as Aquifers
Groundwater 'flows' slowly through an aquifer filtering out impurities, so it requires little treatment and makes an ideal public water supply
However, groundwater levels and river flows remain very low and the Environment Agency says there is little prospect of significant improvement until the autumn.
How will the shortage affect wildlife?
Scientists warn that trees and fish are at most risk from the lack of rainfall.
OFWAT - HOW IT REGULATES
Has legal duty to make sure water firms comply with their licences, which set out their operating conditions
Can issue enforcement orders for firms which breach their licences
Can fine companies 10% of their turnover for breaches of licence or failure to meet standards
Can change a firm's licence
Some areas' groundwater and river levels are well down on what they should be for this time of years. Fish numbers could be affected because spawning grounds have become inaccessible.
Wetland bird populations could suffer from a lack of nesting sites and food sources. There are also concerns for shallow-rooted species of trees, such as beech and birch, because they will not be able to get access to water in the soil.
Would a national water grid solve the shortage problem?
In the past, the idea of a national water grid has been proposed as a solution to end water shortages.
It would involve pumping supplies from one part of the country that had plenty of water to areas that were experiencing a shortfall.
However, such a system would be very expensive to build and operate, and it would take a vast amount of energy to pump the required volume of water through its pipes.
Organisations like Ofwat and the Environment Agency do support the idea of transferring supplies between some neighbouring water companies.
To what extent do new homes put pressure on supplies?
Ministers have said an extra 200,000 houses a year in the south east by 2016 will only increase water demand by 0.1%. But the figures are disputed by research commissioned by the Lords science and technology committee that says demand will be higher.
Can people be disconnected for not paying their bill?
It is not possible to disconnect anyone under current legislation. There is no way of limiting the supply of people who can but will not pay. The report suggests they should have a limiting device put on their water supply.