A group of companies is threatening to withhold payments to Yorkshire Water in protest at price increases following last year's review by the industry regulator Ofwat.
Up to 30 prominent firms in the textile industry - blamed by Yorkshire Water for some of the worst pollution - are predicting big losses if they are forced to pay the higher bills.
The warning by the Confederation of British Wool Textiles that firms will not pay the extra amounts is thought to be the biggest single revolt so far against nationwide changes in water pricing. Higher charges levied by Yorkshire on industry are intended to pay for environmental improvements.
Yorkshire Water said the costs had been agreed with Ofwat and any lost revenues would be met by levying higher charges on other customers. The company's charges for water and treating trade effluent have increased by more than double the inflation rate over the past four years.
Robert Clarke, confederation director-general, said trade effluent charges would go up by 100-300 per cent. The smallest of his members faced an increase of £16,000 in charges, while the largest bill would carry an extra £250,000.
"This additional charge, against an inflation rate of 3.4 per cent, imposes an unacceptable, and in some cases unbearable, burden on all companies and could force many out of business resulting in substantial job losses."
A Yorkshire Water spokesman said: "The wool industry is a heavy polluter. They are attempting to evade responsibility."