Government departments have been told to stop serving bottled water at meetings and switch to tap instead.
Bottled water consumption has risen 43% in five years
Civil Service chief Sir Gus O'Donnell has written to all department heads suggesting they make the switch.
Defra is among departments that have already done so - it had been using more than 1,000 bottles a month.
Tap water uses 0.3% of the energy needed to produce bottled water, without creating the waste, the Cabinet Office said.
Sir Gus said the new policy was expected to come into effect by the summer and was "a small part of a much bigger programme of action in this area".
Last week it was announced that Whitehall would be phasing its use of plastic bags "in line with aims for the wider business community".
In the House of Lords on Wednesday, Labour peer Baroness Quin urged the government to do more to discourage people from buying bottled water and to stop restaurants who deny customers the option of tap water.
For the government, Lord Rooker said in the past five years the consumption of bottled water had risen 43%, but he said it was a matter for consumer choice - although the government was happy to "talk up the use of tap water".
Independent Labour peer Lord Stoddart said people were being "ripped off" as tap water cost about 80p per tonne, while it cost 80p for a bottle of water.
Lord Rooker said: "People have a choice and the government should not be in the position of removing it from them - but it should be an informed choice, both on the cost economically and the cost to the environment."
Last month the BBC's Panorama programme looked at the cost of bottled water supplied to English and Welsh councils, following requests for details under the Freedom of Information.
The programme, Bottled Water - Who Needs It? found councils had a bill totalling more than £5m. Hampshire County Council topped the list with a bottled water bill of £141, 215 between November 2006 and October 2007.