Environment Minister Phil Woolas has said small households are paying too much for their water, and are subsidising customers with meters.
People are being urged to install water meters to save money
Water bills are set to rise by about 6% across England and Wales.
Water regulator Ofwat says water meters could be a solution for some customers to help them cut costs.
The government is to review water supplies and charges, which may mean compulsory meters where water is in scarce supply.
The minister, Phil Woolas, told the BBC the government wanted to bring in a fairer system.
"Those that don't have meters - if they're in small households, small families - are in effect subsidising the people with meters, and that is something that we are looking to change, so that we can have a fairer system", he said.
The BBC's Sarah Pennells said that there are about two million flats where it would be difficult to install water meters, because it would involve separating a shared water supply.
Ofwat says the impending increase, which householders start paying from April, will make the average bill (for water and sewage treatment) £330 a year.
This means a rise of about £18.
But the combined bill rise is nearly 8% in some areas. Last year's average price increase was 7%.
Read a selection of your comments on this story:
Older maisonettes can't get meters either. When I got an offer for a meter and realised just how much I would save. I live alone and am out all day at work, I tried to get one, but the paperwork won't allow it.
I am a single male living in a council flat. I would not be able to have a water meter here. I am paying the same price as a large family for my water, whereas a large family would use at least five times the amount of water I do. Is this fair? Of course, no-one is interested in helping single people with no dependants... it's all about helping families.
Keith Lewis, Birmingham
I have not got a meter and don't want one. (Though I pay more than £500 pa, I am definitely subsidising those who do and I strongly object to the coercion). Metering is a retrograde step towards an unwanted (further) overregulated, over controlling society. It costs more than £1000 to install a single meter. So how long will that take to recover in your bill? More relevantly: If the water companies spent £1000 per customer on fixing leak there would be no problem to solve anyway.
I am 65 yrs old and live alone on state pension in a semi detached 2 bed property. I had a water meter installed nine months ago and the saving has been in the order of 65%. Together with prudent use of water, washing up once a day, showers instead of baths and using washing machine for full loads only this action has been very beneficial to my overall financial situation.
Peter Winfield, Leeds
How can water companies justify an above inflation increase when they are making record profits year on year.
Stuart Evans, Wigan
Our un-metered water/sewage charge was £500. Now that we have a meter it is £195 per year. We now collect water from the roof for the garden.
Ian Young, Spencers Wood, Reading
The problem with water is it's based on the council tax bands.
If I go to Tesco I pay the same as everyone else for whatever I buy but with water you pay on the value of your home.
Petrol, food, gas, electric we all pay the same except for water.
Its time there was a flat rate for everyone for water as it's something you cannot do without.
Les Watson, Swansea
i have just received my Water bills for next year and they have gone up 10 %, how can they justify the increase, my wage goes up on ave 3% per annum how can i afford to pay for this unjustifiable increase, its daylight Robbery!!!!!!!
Mark Storey, Carnforth, Lancashire
These comments are a further attack by the Government on large families. In the end only the very rich will be able to afford to have more than two children. Outrageous.
You don't only pay for the water you use. You also pay for the water companies' leaks. They never repair those properly because it would divert money from the shareholders and anyway they still get away with blaming the Victorians.
We moved from a house with no meter to one with a meter. It does make me think more about the water I am using, as I know every litre costs me money. With increasing demand for water the only fair solution is for everyone to be metered. This will deliver real savings and stimulate the market to produce further water-saving devices and technologies for the home. We wouldn't dream of paying for our petrol on an unmetered basis so why should water be any different?
Gary Herring, Redhill
How can the Government minister have got it so wrong? It's the people in large households without meters who are being subsidised. People with meters are paying their fair share.
Don Hargreaves, Leicester