The government's water White Paper is a "bold vision" for managing and harnessing an increasingly scarce but vital resource, Environment Minister Richard Benyon has said.
Mr Benyon told MPs that making sure there is enough water for everyone will be "one of the major challenges this country will have to deal with in the coming years ahead".
He said the policy paper recognised that water was essential for economic growth and "that we must protect the environment for future generations".
The minister was summoned to the despatch box to answer an urgent question by Labour on the water white paper, on 8 December 2011 - the day it was released.
The paper plans to modernise rules governing taking water from rivers and to encourage local organisations to improve water quality and extract water from the environment in the least harmful way.
It also aims to reform the water industry and deregulate water markets to allow business and public sector customers to negotiate better services from suppliers.
Other measures include removing barriers, discouraging new companies from entering the market, allowing firms to introduce new social tariffs for customers struggling to pay their bills, and tackling the "historic unfairness" of water infrastructure in the south-west, Mr Benyon said.
Labour welcomed measures for greater competition in the market and to establish a cross-border market between England and Scotland for water and sewerage services.
But shadow environment secretary Mary Creagh criticised plans to tackle the problem of rising household bills as "weak and unclear" and said the paper was "silent" on how the sector will reduce its carbon footprint and encourage energy from waste.
She said the 2027 deadline on removing historical abstraction licences, "which cause such damage to our environment", was "far too late".
Liberal Democrat Andrew George, the MP for St Ives, said the ability across companies "to respond to the advantage given to them with regard to social housing" will vary between company areas, and asked the minister to keep that under review.
Mr Benyon said the government would take his concerns into account, adding: "We want company social tariff schemes that really do work, that really do get to those in fuel poverty."
Green MP Caroline Lucas welcomed the paper but said it wasn't very "ambitious" in some areas. She asked what plans there were to include a mandatory requirement to have rainwater harvesting in all new homes.
Mr Benyon replied that the onus would be on developers to show that construction has a minimal impact on environment. He added that this would be a driver towards using water sensitive conservation measures.