Water company efforts to protect the environment are “simply unacceptable”, the Environment Agency has said.
There were 56 serious pollution incidents last year, rising from 52 in 2017, the agency’s annual report said.
Only one of the nine major water companies in England is performing at the expected level, with most likely to miss 2020 targets, the agency added.
Trade body Water UK said the report was “disappointing” and the situation was “never black and white”.
Only Northumbrian Water achieved the highest four star rating.
In June, the firm agreed to pay more than £1.1m after accepting responsibility for five historical environmental offences.
Severn Trent Water, United Utilities and Wessex Water dropped from four stars to three stars, meaning they must improve their performance to reduce their impact on the environment.
Anglian Water and Thames Water remained on three stars and Southern Water, South West Water and Yorkshire Water achieved just two stars for their “unacceptable level of performance”.
South West Water was given a red rating for pollution incidents for “consistently demonstrating unacceptable performance”, while Southern Water and Thames Water failed to demonstrate they had robust plans to maintain secure water supplies.
The report follows the agency’s announcement that Southern Water is facing prosecution after it was hit with a record £126m penalty package over “shocking” failures in its sewage treatment sites.
Environment Agency chairwoman Emma Howard Boyd said: “There’s no getting away from the fact that performance in 2018 was simply unacceptable.”
She said the agency would “toughen” its regulation and inspections, with a focus on “tackling the behaviour which is doing most damage to the environment”.
Agency director of operations Dr Toby Willison said: “Water companies need to clean up their act.”
However, Water UK chief executive Michael Roberts said the assessment was “disappointing” as firms had made “major progress” to improve the environment.
“As the Environment Agency acknowledges, the situation is never black and white,” he said.
“Six out of nine companies are rated good or better in the assessment, and the most serious pollution incidents are down 18% on the previous year, but there is much more to do across the board to achieve the high standards which people rightly expect water companies to meet.”
Environment Secretary Michael Gove said the “damning report” showed all but one firm was “failing to protect” waterways from “serious pollution and the effects of climate change”.