Millions of people in London are facing a possible hosepipe ban, Thames Water has said.
The company, the capital's biggest water supplier, said its reservoirs, rivers and aquifers were lower than usual for the time of year.
It is due to a drier than average winter period and recent high demand caused by the heatwaves, the firm said.
It has been asking customers to limit water usage since May and said any ban would depend on upcoming water demand.
The supplier said the recent heatwave had led to "extremely high demand", its highest for 25 years.
It said the next stage of its "drought plan" would be to introduce a temporary-use ban, which was likely to include hosepipes.
A spokesperson said: "Our teams have been working 24/7, during incredibly hot conditions, to maintain supplies to customers, ensuring the output of our supply systems are running at maximum capacity."
The firm said recent hot weather had followed a period of lower-than-average rainfall, which meant many water sources were lower than usual before the summer even began.
Nine out of the past 11 months had been drier than average, the company said, with July being confirmed as the driest since 1935.
July also saw record-breaking temperatures, and which led the company to issue a further plea to customers to limit their usage.
Last week, the Met Office also said the UK had experienced the driest start to a year since 1976.
The Thames Water spokesperson added the timing of any ban would "depend on the amount of water used by our customers, which determines the speed at which reservoir storage declines, and the amount of flow in the rivers, which determines how much water we can take to refill them".
They also suggested longer-term restrictions might be necessary if rainfall did not increase during the autumn and winter.
Affinity Water, the capital's second largest supplier, said its water sources were also lower than average.
A spokesperson said: "At current levels, we should not need to introduce restrictions this year, however we are dependent on rainfall over the upcoming autumn/winter period to refill groundwater aquifers for spring/summer 2023 and we are closely monitoring the situation."
The announcement comes as millions of customers across Kent, Sussex,Hampshire and the Isle of Wight will soon face fines for using a hose to water their garden or fill a paddling pool.
Southern Water and South East Water are to introduce bans on 5 and 12 August respectively.
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