United Utilities has responded to protests over high prices
Community groups are celebrating after water company United Utilities agreed to freeze the rates it charges charities and religious organisations.
The company, which operates in Cheshire, Cumbria, Lancashire, Manchester and Merseyside, was among several companies due to raise prices.
However it bowed to pressure from community groups who said they should be treated differently to supermarkets.
Most water firms say the rises are in line with official advice.
Hundreds of churches and charities across England have been hit by what they call "sky-high" increases in water company charges.
Campaigners fear churches may cut back on good works or even close down because they cannot afford the increases.
The bills are rising because some water companies now charge churches and charitable organisations the full cost of draining the rain that falls on their roofs.
But United Utilities has agreed to freeze charges at this year's rate and and phase in new charges only when a longer term solution is found.
Scout Association spokesman Simon Carter told the BBC the organisation was encouraged by the firm's stance and hoped other water companies would follow suit.
He said some of his troops would have seen their water bills rise by as much as 4,000% and added: "The government needs to take action but the water companies need to follow the same stance.
"It is good to see this company take a brave step, although this is only a partial moratorium.
"These were inappropriate charges. They were treating scouts in the same way they treat supermarkets."
Mr Carter said the charges would have threatened the existence of some scout groups.
A spokesman for United Utilities said it believed its price increases were fair, but it would freeze the charges for this year.
He said: "We have been listening to the concerns of some groups and looking for ways of minimising the impact on organisations which have seen large water bill increases - particularly faith buildings, community amateur sports clubs and Guide and Scout Association buildings.
"We will not phase in any more of the charges for these customers until Ofwat agrees that we can implement a longer term solution.
"In addition, we will continue to work with our most affected customers to help them minimise their charges and their impact on the environment."
Nearly 40,000 people have signed a petition calling on the prime minister to force water companies to exempt churches and charities from the higher charges.
In the past, many churches were exempt because drainage charges were based on their "rateable value" - often calculated as close to zero.
But now the bills are levied according to the total surface area of roofs and other hard surfaces - such as pavements and car parks.
It means that in many cases churches find themselves being charged substantially more than shops and other profit-making premises.
Water companies argue that churches and charities need to pay their share of the cost of draining rainwater away into the sewers.
But the protesters say they should be exempt because they provide a social service, which is now being put at risk.
So far Northumbria, Severn Trent and Yorkshire Water have imposed the charges.
In Scotland, small charities, churches and voluntary groups have been given exemption from water charges for the next six years.
Welsh Water has said it had no plans to change its charging system.
Water companies say they are only following the advice of Ofwat, which maintains that charging for drainage costs is "the fairest way."
The watchdog says the cost of providing surface water drainage in England and Wales is about £700m each year.
A spokeswoman for the Department for the Environment told the BBC ministers were reviewing the situation.