Dimas said he wanted to "move the EU towards a water-efficient and water-saving economy" by invoking a "user pays" principle by 2010.

"The user-pays principle needs to become the rule, regardless of whether the water is taken from a tap, a river or an aquifer. Compulsory metering programmes are thus essential," the paper says.

EU data shows droughts have dramatically increased in number and intensity in the past 30 years, with the cost to the European economy over that period at least 100 billion euros (US$138 billion).

A widespread drought in 2003 affected over 100 million people and about a third of the EU land area, costing some 8.7 billion euros.

"Access to water in sufficient quantity is fundamental to the daily lives of human beings and many economic activities. The major impacts of water scarcity and droughts are expected to be made worse by climate change," Dimas said in a statement.

On average 20 percent of water used is wasted across the EU each year and the figure is set to double in coming years, the EU executive said.

PUBLIC OPINION

Wednesday's paper advocates a need to put a price on water and estimate its worth to the EU economy. It proposes a pricing system that gives an incentive to consumers and businesses to economise water.

Some of the other proposals include:

- the installation of water-saving devices on taps, shower heads and toilets;

- buildings to be built and designed with water saving in mind, including fines for excessive leaks;

- a new EU label to promote water-efficient and water-friendly products and devices.

Some EU countries bill consumers and companies for using water, while others have introduced special schemes..

These include a ban by Britain in 2005 on using hoses for watering gardens and washing cars during hot summer months, promoting showers rather than baths in Scandinavia and charging for tap water in nightclubs and bars.

However, a quick poll of people enjoying the hot sunshine in Brussels on Wednesday showed Dimas' plan to place an increased premium on water may not cut much ice with the public.

"Charging people or businesses is not the solution, or increasing their water bills, it's about educating people such as taking a shower instead of a bath," bar manager Lee Ober, 31, from the United States, told Reuters.

"Water along with food and shelter is a basic human commodity, so we should not be charged for it. If the EU is about solidarity, we should look at ways of getting water from countries with lots of water to those with problems," said Joe Lynam, a 36-year-old journalist from London.

Local businessman Tony Mallet, originally from Britain, said: "Europe isn't exactly short of rain, so come on. It's about forcing water companies, which already make lots of money, to invest in their infrastructure."