Almost half of water companies will not be required to reduce their leakages before 2015 despite the country's worst drought in 25 years, regulators say.
Ofwat said eight out of 21 water companies had been set zero reduction of leaks targets to 2014/15, despite hosepipe bans being declared in central and southern England.
The firms include Yorkshire Water, which failed to meet its 2010/11 targets and as a result was required to spend an additional £33m on leak repairs, Ofwat said.
Shadow water minister Gavin Shuker said the "vested interests" of water companies meant leaks were not being repaired.
He told the Guardian: "Clearly there are vested interests at play. It costs more to repair leaks than the immediate value of the water itself, so while it makes sense for a water company to ignore leaks, it certainly doesn't stack up in the long term for us, the consumers, or for our environment. Yet the government appears to have dropped its water bill from the forthcoming Queen's speech. What will it take to ensure ministers start holding these offshore-owned water companies to account?"
Southern Water had to pay £5 million back to customers after missing its latest leak target by 16%, Ofwat said.
The regulator has revealed water companies across England and Wales leaked more than 3.3 billion litres a day in 2010/11.
Ofwat said it was urging firms to "step up to the plate" to reduce their leakages. However, customers may have face higher prices to cover the cost of fixing leaks, it added.
An Ofwat spokesman said: "The current drought shows the importance of tackling leakage. Companies need to listen to - and respond - to their customers. During a period of drought, companies need to step up to the plate and do more to tackle leakage. We also need to take a long-term view. Climate change and more households will stretch water supplies even further in coming years.
"We know leakage matters to customers, but they also tell us they don't want large rises in bills to reduce leakage. And fixing leaks can be costly. Replacing all the pipes in England and Wales would cost an estimated £100 billion - and still leakage levels would only be halved. We need to get the balance right, so we can ensure customers continue to get a fair deal."