Farmers struggling in the hot dry conditions will be allowed more flexibility in the rules on taking water out of the environment, the Environment Agency said.
The move will make it easier to trade water allowances between farmers to maximise supplies and help them to make the most of extra water in rivers after heavy rain.
The Environment Agency may allow farmers to take additional water on an emergency basis if there is a real or imminent threat to crops and livestock, officials said.
But cases will be assessed to minimise impacts on the environment and other water users.
The Environment Agency announced the changes after the National Farmers’ Union (NFU) met Government officials in London on Wednesday to discuss “tinderbox” conditions that have reduced grass growth and “depleted” some yields.
The UK has seen its driest first half of summer since 1961, with last Thursday and Friday bringing the first rainfall in weeks, and farmers have warned the hot, dry conditions have hit harvests.
Scientists have said the heatwave gripping northern Europe was made twice as likely by climate change, and the UK faces a future of increasingly common episodes of extremely hot spells.
Speaking after the meeting, Environment Secretary Michael Gove emphasised the importance of supporting future food production and taking steps “in order to ensure we can improve and enhance our resilience against the challenge of climate change”.
Paul Hickey, head of water resources, Environment Agency said: “We know that farmers are facing considerable pressures in responding to drought conditions and we want to support them by allowing them to flex their abstraction licences in the most serious cases to safeguard food production and animal welfare.
“We must also balance farmers’ needs with those of wildlife and other water users so we will only allow these arrangements where we are satisfied there won’t be any adverse effects on the environment.
“As the hot, dry weather is set to continue we urge everyone to use water wisely to protect the environment and help prevent the need for water restrictions.”
Country Land and Business Association president Tim Breitmeyer said it was “vital” to relax the rules on water abstraction, and also called for early subsidy payments to help with cash-flow issues during the heatwave.
And he said: “One solution to ease this drought situation which could potentially increase year-on-year due to climate change, is to focus on long-term water management.
“We need investment now to secure future water supplies so that the impact of such extreme weather does not have a detrimental effect on food production and the environment over the next 50 years and more.”
Farmers also face uncertainty over the future of the sector after Brexit, with changes to their subsidies and potential impacts of trade deals with the EU and countries such as the US.
Speaking after the summit, NFU president Minette Batters warned: “I think Brexit adds a whole air of uncertainty in general, which doesn’t help, and as we go into next year when we leave the EU it certainly does not help matters because as you know it is an uncertain time.
“Farming is a long-term business, farming is all about planning – not just for next year, but indeed years ahead, and we do not have any sense of certainty at the moment in terms of what the impact of Brexit will have.”
NFU deputy president Guy Smith urged people to be careful in the countryside, asking them to be responsible with things such as portable barbecues and warning that sky lanterns “really aren’t a good idea” in the current dry conditions.