One of the UK's biggest water suppliers will not yet be imposing a drought order, it has been announced.
A drought order would see severe restrictions on water use
The Environment Agency had called on Thames Water, which serves 3.7m homes in London and south-east England, to apply for the restriction order.
On Friday the firm said that while the drought was serious there was currently no need for further restrictions.
River flows are being maintained, reservoir storage is increasing and demand is falling, said a spokesman.
Hosepipe bans are now in force in the region and Sutton and East Surrey Water have been granted a drought order.
A drought order bans car washing, the filling of swimming pools and the watering of parks and sports grounds.
Jeremy Pelczer, chief executive of Thames Water, said: "Our current projections indicate the situation remains serious, but does not yet justify an application for a drought order.
"In making a decision, we need to consider long-term questions, such as how long the drought might last and the possibility of a third consecutive dry winter.
"The situation remains finely balanced and we will continue to review it weekly. There remains a distinct possibility that we will need to apply for a drought order in the coming weeks."
Southern Water and Mid-Kent Water have also requested drought orders.
Earlier this week, hundreds of fish died in a stream near Reading after low water flow led to an obstruction and the fish were unable to escape rising temperatures and falling oxygen levels.
The Environment Agency has warned that the South East could be on course for its worst drought conditions for a century.