The Brussels-based commission says that the maximum lead limit set in its existing drinking water directive should be lowered fivefold to protect babies and children from brain damage by the toxic metal.
The commission is drawing up a new directive and an early draft has been leaked to the environmental group Friends of the Earth.
The proposed limit of 10 micrograms per litre of tapwater is in line with a tougher safety limit recommended by the World Health Organisation two years ago. Scientists are becoming increasingly convinced that at very low concentrations lead can affect nerve and brain development.
But to guarantee meeting this limit, lead piping would have to be replaced in all 9.3 million homes which contain it, according to the Water Services Association which represents the 10 largest water companies in England and Wales. At an average cost per property of pounds 630 that is pounds 5.9bn.
Replacing lead mains would cost a further pounds 2.6bn, making a total of pounds 8.5bn.
The great bulk of the contamination is caused by lead plumbing on the customer's side of the stopcock rather than by the mains. Strictly speaking, the responsibility of the water companies for tap water purity ends once past the stopcock on the pavement outside the house.
The European Commission proposes that member states should have 15 years to bring the lead limit down from the existing 50 micrograms per litre to 10.
Within five years of the new directive coming into force, they should meet an interim limit of 25.
Friends of the Earth estimates that about 800,000 people in England and Wales are receiving drinking water that is sometimes or always above the 50-microgram limit. More than one in ten of the United Kingdom population has tapwater breaching the proposed new limit.
The irony for the British government is that it spent years campaigning for a revised European drinking water directive on the grounds that the first version was drawn up without weighing its costs against benefits and was too expensive to implement. The new directive looks like adding further substantial costs.
Britain and some other nations may resist such a strict new lead limit as the final version of the directive is negotiated. A spokesman for the Department of the Environment said that the World Health Organisation safety level refers to a weekly average in tapwater, not a single sample.
'This is going to be a difficult one,' said the spokesman. If it is necessary to replace many or all lead plumbing to comply with Euro-law then the Government will have to find ways of compelling millions of householders to have the work done.'