The NIC says the nation must reduce water supplies to protect itself against surging demand, extreme droughts and a growing population.
The report said: “Over the coming decades the UK faces a real and growing risk of water shortages, especially in the south and east of England.
“The Government must deliver a combined additional water supply and demand reduction of 4.8bn litres a day by 2050.”
The NIC suggests this could be achieved by building or extending reservoirs, desalinating seawater and creating water recycling plants where treated sewage water is pumped back into the drinking supply.
It also claims that compulsory water metering could reduce demand by 17pc across the country.
Sir John Armitt, the NIC’s chairman said: “We face a make-or-break time for the long-term prospects of UK infrastructure. There has been some progress. But other areas have seen few developments, or worse, progress has reversed.”
The report also criticised the Government’s progress in cutting greenhouse gas emissions, especially from the domestic boilers relied on by 25 million homes for heat and hot water.
It said ministers must bring in radical new measures to persuade households to replace boilers with heat pumps, including interest-free government loans and subsidies of up to £12bn a year.