Fresh floods have hit Oxford while residents further along the River Thames have been warned that water levels are likely to peak later.
Homes were evacuated in Oxford overnight while places including Reading, Henley and Caversham are braced for similar flooding.
About 350,000 people in Gloucestershire without tap water are getting supplies, but could be cut off for up to 14 days.
The prime minister said flood-hit councils would receive £46m in aid.
Gordon Brown also told the House of Commons he would push insurance firms to make payouts.
Refused to move
The Environment Agency still has six severe flood warnings in place - three on the Severn - in Gloucester, Tewkesbury and Worcester - two on the Thames around Oxford, and one on the Ock, near Abingdon, Oxfordshire.
BBC weather forecasters said flood-hit areas would see heavy rain of 10mm to 15mm on Thursday.
These levels are not expected to make the flooding worse but could slow the speed at which waters recede.
Water levels in the Thames around Oxford rose throughout the night and are expected to peak later.
The Environment Agency said the river had breached its banks in Henley early on Wednesday evening and flooding was possible. It is expected waters will rise in Reading and Caversham later.
Waters are also predicted to peak at Pangbourne, Purley-on-Thames and Mapledurham on Wednesday evening, with residents braced for floods.
It is predicted Windsor, Eton and Maidenhead will escape flooding while Marlow, Cookham, and Staines will see limited flooding later this week.
Responding to questions in the House of Commons Mr Brown said all councils affected by the floods would receive 100% compensation.
He said £46m had been made available by the government in the immediate future and annual spending on flood protection would rise to £800m by 2010/11.
Meanwhile, the RSPCA has launched an appeal for donations, saying the rescue of pets and farm animals has already cost £300,000 and involved the biggest deployment of its staff for a generation.
Of those evacuated in Oxford, about 30 people went to a shelter set up at Oxford United Football Club's Kassam stadium while another 250 decided to stay with family and friends.
Those who stayed in their homes told how water began flowing in at about 0300 BST.
Angela MacKeith, 61, said: "We are under 2ft of water throughout the house.
"The awful thing is that this time last year we were in the same situation after a flash flood.
"It appeared to be bubbling straight up from the water table."
The Environment Agency's Robert Runcie said it was not the Thames causing the problems in Oxford, but the tributaries flowing into it and creating the higher levels.
There had been concerns about Osney Mead substation, which supplies power to Oxford city centre, but this has now receded, according to the county council.
In Gloucestershire, water supplies have been cut off after a treatment plant flooded.
Severn Trent Water is supplying water tankers known as bowsers, while the army is delivering three million bottles of water a day from a base Cheltenham racecourse.
But Gloucestershire's Chief Constable Tim Brain said there had been instances of people "behaving most selfishly", using "very large receptacles" to empty bowsers and trying to resell water at inflated prices.
"That is simply theft and it is being treated as theft," he said.
Visiting Gloucestershire on Wednesday, Mr Brown said great efforts were being made to help those without water, but added: "We've got to get the supplies stepped up."
"We will get more tankers in, we will get more bowsers in, we will get more regular filling of them, and at the same time, more bottled water will be provided."
The prime minister said the loss of water supply was a "disappointment", but insisted a government review of the flood crisis and the response to it would look at whether similar problems could be avoided in future.
Long queues formed in supermarket car parks on Wednesday as people waited to collect their daily ration of six two-litre bottles of water.
At Tesco in Quedgeley residents said the crisis had fostered a war-time spirit.
Reginald Davies, 91, who fought during the Second World War, said: "I did five days without water in Burma.
"I've seen men go mad from thirst. This is nothing. The worst thing is getting out of bed in the morning at 91 to get water."
Five brewing companies, Coors, Carlsberg, Scottish and Newcastle, Inbev and Greene King, have offered the use of 23 beer tankers to help with the delivery of drinking water.
Dr Brain said it could take seven to 14 days to restore supplies, but advised people to remain calm as there was enough water for everyone.
Severn Trent Water said on Wednesday evening that it hoped to use a temporary solution to restore water supply to 10,000 homes in Tewkesbury from Thursday.
Gloucestershire County Council's chief executive Peter Bungard said the council had received 10,000 calls for help and advice since Monday morning.
He said there were about 25,000 elderly and vulnerable adults in the county and that 1,400 portable toilets had been ordered for those most in need.
Central Trains - services between Great Malvern and Hereford suspended
First Great Western - services suspended between Oxford and Didcot, and Oxford and Worcester
Virgin trains - services between Oxford and Reading suspended
Gloucestershire Police said teenager Mitchell Taylor, 19, who has not been seen since the height of the floods was still missing.
He disappeared after leaving a bar in Tewkesbury in the early hours of Saturday. It is not known if his disappearance is related to the floods.
There have been calls for the government to seek money from the EU's Solidarity Fund to help cover costs arising from the floods.
Conservative MEP for the South West Neil Parish said: "There's money available to restore the infrastructure for drinking water, transport, telecommunications, health and education."
The European Commission's Anthony Gooch told the BBC: "If Britain wants money from the Solidarity Fund then there's every chance it will get it. A major disaster of these proportions is exactly the sort of unfortunate event that we created this facility for."
Environment Agency floodline: 0845 988 1188
SEVERE FLOOD WARNINGS IN PLACE
The Severn: Severe warnings for Gloucester, Tewkesbury and Worcester
The Thames: Severe warnings affecting Eynsham to Sandford Lock and also Little Wittenham
The Ock: Severe warnings from Charney Bassett to Abingdon