The move comes on the eve of a report from the Department of the Environment which will recommend targets for the companies to reduce water leakage.
However ministers do not plan to make these reductions compulsory, arguing that the individual companies know best how to tackle the problem of leaks in their regions.
The political arguments about the failure of the private companies to stop massive leaks from the system seem likely to grow as the worst drought for 250 years lengthens.
The London Weather Centre predicts that the only rain to fall this week will be scattered showers in West Scotland and West Ireland. Temperatures in the rest of the country are likely to remain in the 80s, with southern England seeing highs of 30C (86F).
The Opposition will argue that with 16 million consumers facing hosepipe bans, the government's hands-off policy will be ineffective. It will press for mandatory targets for the reduction of leaks and warn that a Labour government will consider forcing the water companies to pay compensation if stand-pipes are introduced.
Frank Dobson, Labour's environment spokesman, said that, if necessary, Labour would require the water companies "to reduce leakage year on year".
He added: "People should get rebates if they are not getting water to which they are entitled."
Last week the industry regulator Ofwat backed the idea of rebates for customers if stand-pipes have to be set up.
Yorkshire Water has installed them in Bradford, although they have not yet been required.
The two political parties will also be at loggerheads over the introduction of water meters. The Department of the Environment is thought to favour the spread of metering to reduce consumption. Labour argues that the most effective method of charging for water is through the Council Tax banding system.
Yesterday the salaries enjoyed by well-heeled water company executives continued to arouse political anger. Yorkshire Water, which has imposed a hosepipe ban on a million customers, said it had appointed a public relations manager for pounds 80,000 a year.
Margaret Stewart, 44, will be in charge of eight press officers. Leeds Central Labour MP Derek Fatchett said: "It seems a bizarre piece of PR. Yorkshire Water customers would rather see water coming out of their taps than their money being poured down the drain."
Diana Scott, a member of the consumers' group Yorkshire Waterwatch, said the company had not kept the promises made at the time of privatisation to improve the system.
The drought, meanwhile, continues to blight the countryside.
About 100 fire-fighters contained a fire which was blazing across open grass and scrubland on the Malvern Hills in Hereford and Worcester. They are not expected to finally put it out until late today.
The Royal Horticultural Society at Wisley, Surrey, warned that millions of flea beetles have been driven by the heat from their normal feeding grounds in fields and are now munching their way through the nation's gardens. The beetles have a particular liking for cabbages, but are also partial to nasturtiums, wallflowers, aubrietia, alyssum, stock and honesty.
The AA warned that drivers are risking serious accidents by taking their eyes off the road and hands of the wheel to swat wasps which fly into their cars.
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