Drought is set to spread to more areas of the country if dry weather continues this spring, the Environment Agency has warned.
Well-above average rainfall is needed in March and April to ensure water levels recover in southern, eastern and central England, but the chances of receiving sufficient rain in the coming weeks are very low.
As a result, the Environment Agency warned it was anticipating a "severe drought" this spring and summer in parts of England.
All of East Anglia and the South East are already officially in drought after two very dry winters. Parts of eastern England have been drought-stricken since last summer.
A new report from the Environment Agency warns drought could spread as far north as East Yorkshire and as far west as the Hampshire-Wiltshire border if the dry weather continues.
The study says significant recharge of groundwater supplies in drought-affected areas is now unlikely before warmer weather and the spring growing season reduce the amount of water going back into the ground.
Even with a fifth more rain than normally received over the summer, many aquifers could still be well below normal levels over the coming months.
While the rain in early March was welcome, it has not reversed the impact of two consecutively dry winters, the Environment Agency said.
Levels of rainfall well above average are needed in March and April to fully restore the situation in eastern and southern England and some central areas, but the Met Office has warned the chances of receiving enough rain is low.
The latest weather forecasts suggests mild and dry weather will continue for the next few days, and in southern parts the warm and dry conditions could persist into April.
The Environment Agency drought prospects report warns fruit, vegetable and salad growers in the southern and eastern parts of England could be hit by a lack of water, while livestock farmers - who are already facing high costs of forage - could also be affected.
Wildlife such as fish, rare amphibians including natterjack toads and other plant and animal species which rely on rivers, ponds and wetlands may be lost from some sites, pollution incidents will be more damaging and forest fires are more likely.
Some individual power stations which need water for cooling may be affected by water restrictions, although this should not have an impact on the grid as a whole, while water-intensive companies such as concrete producers may also be hit.
And boating on the Oxford and Grand Union Canal could be restricted during the main boating season between April and October. Water levels on the Kennet and Avon Canal could be at risk.
Lord (Chris) Smith, chairman of the Environment Agency, said: "We are working with businesses, farmers and water companies to meet the challenges of a continued drought.
"Our report urges water companies, farmers and businesses to look again at ways to improve short-term water storage, share water resources where possible and reduce the amount they and their customers use.
"A prolonged drought will have long term impacts on wildlife and habitats. The Environment Agency is actively monitoring the environmental impact of the drought and will take action to mitigate these impacts wherever possible."