Leaking pipes could leave Londoners short of water within the next 10 years, according to a report.
Thames Water says its spending £90m per year on leaks
The London Assembly blames Thames Water for failing to meet leakage reduction targets over the past five years.
A quarter of all the water lost in England and Wales each year comes from the Thames Valley region.
Thames Water admits leakage is high, but says it spends £90m per year on finding and mending leaks which should prevent any shortages.
The London Assembly report says nearly 1,000 million litres of water were lost in the region in 2003/04.
'Stretched to limit'
It also accuses Thames Water of having no long term plan to deal with the problem.
Darren Johnson, chair of the assembly's environment committee, described the company's "failure" to meet leakage targets as "unacceptable.
He said: "We're storing up major problems for the future. Planned development in London and the South East will stretch water supplies to the limit.
"Water companies' priorities seem to be big profits and dividends and bonuses for executives and shareholders. Continuing this attitude will be disastrous."
But a Thames Water spokesman said reducing leaks was the company's "top priority".
He told BBC News: "The claim that we have no detailed long-term programme is simply wrong.
"We have already replaced more than 130 miles of pipes in London, since launching this renewal work in 2002, and will be accelerating this to replace 850 miles of pipes in the next five years.
"We need to balance this with the need not to cause too much disruption through roadworks."
The committee also recommends that developers and builders take more responsibility for water conservation to enable householders to be more efficient.