The ban by Three Valleys Water will affect people in Herts, south Bucks, west Essex and north west London.

This is the first time the company has imposed a hosepipe ban since 1992 and follows a call by the Environment Agency to reduce water usage.

The firm said it was acting to prevent any problems.

Three Valleys Water relies mostly on groundwater taken from the aquifer below the ground rather than rivers for supplies.

There is likely to be enough water stored under the ground to last throughout the summer, if the weather conditions are fair and we all use water wisely Peter Darby

Peter Darby, managing director, said: "Whilst we are not running out of water, our supply levels are low and we need to be mindful of the position we may be facing in 12-month's time if the drought continues.

"We very much regret the inconvenience that will be caused to our customers. Our immediate concern is that we are already seeing lower flows of water in many of our rivers and streams.

"These lower flows will be exacerbated if there is a dry summer and people continue to increase their water use, so the ban will help to prevent long-term damage to these habitats.

"There is likely to be enough water stored under the ground to last throughout the summer, if the weather conditions are fair and we all use water wisely."

Limit damage

The company is taking precautions in case of a third dry winter at the end of this year which would cause supply problems in 2007.

"This is why we are introducing a hosepipe ban at this stage and are asking our customers to be sensible in their use of water," Mr Darby said.

"We feel this is a wise approach at this time and will help to avoid possible supply problems further down the line.