Plans to build the UK's first plant to turn salt water into drinking water have been blocked by London's mayor.
The plant would have "guaranteed" water during drought periods
Ken Livingstone said the proposed £200m desalination plant by the River Thames in Beckton, east London, would consume too much energy.
The mayor over-ruled Newham councillors saying people should conserve water.
Thames Water, which is considering an appeal, says the plant is essential in ensuring London has enough water for its growing population.
Rejecting the proposal the mayor said: "I am not convinced that a desalination plant is a viable long-term way to ensure London has an adequate supply of water.
London is drier that Madrid or Istanbul
Average person uses 163 litres daily in Thames Water area
Average person used 140 litres in 1980
800,000 residents are expected to move into London by 2016
"With increasing concerns over the damage we do to our environment and climate change, it's important that we reduce rather than increase the levels of energy we use in London.
"Like any city London does not have unlimited natural resources and we need to educate people to be more careful to avoid wasting our water both at home and at work."
A spokesman for Thames Water said: "We are concerned that, without new sources of water, we will be unable to meet increasing demands.
"The plant has been designed to play a key role in guaranteeing water supplies to customers during drought periods."
Desalination is a relatively recent solution starting in the Middle East in the 1980s and 1990s.
Thames Water planned to use a process known as "reverse osmosis" to draw salt from the Thames.
The company is in the process of replacing 850 miles of water mains over the next five years and looking at plans to build a new reservoir near Oxford to store surplus winter river flows to ensure London has enough water in the future.