THE company which supplies most of the water to homes in London has decided not to apply for a drought order.

The Environment Agency urged Thames Water, which supplies water to four million homes, early this week to apply for the order to further limit its customers' non-essential water use.

Low rainfall over the last 18 months has already led to a hosepipe ban and experts have warned that with the hot summer months approaching we could be facing the worst drought for 100 years.

Thames Water said that while the drought was serious, the situation did not yet warrant applying for further restrictions.

Local river flows are being maintained, reservoir storage is increasing and demanding is falling, the company said.

Thames Water chief executive Jeremy Pelczer said: "In making a decision, we need to consider long-term questions, such as how long the drought might last and the possibility of a third consecutive dry winter.

"We also need to take into account more immediate issues like rainfall levels, the ability to recharge reservoirs and ongoing efforts to reduce demand.

"We are very mindful of the impact a Drought Order would have on many individuals and businesses, whilst at the same time we understand the very legitimate concerns of the Environment Agency.

Mr Pelczer said the situation would be reviewed weekly.

"There remains a distinct possibility that we will need to apply for a Drought Order in the coming weeks," he said.

The order would ban the watering of public and private gardens and lawns, the washing of vehicles, railway stock or buildings, and the filling of swimming pools and ponds.

On Monday, one water company in Sutton and East Surrey announced a drought order banning the use of non-essential water. Standpipes could also be introduced there to limit water use.