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Sir Keir Starmer said ministers were holding emergency meetings every day as 17,000 homes in Kent and Sussex remained without drinking water.
Southeast Water Affairs (SEW) blamed Storm Goretti for the latest supply disruption, which followed a similar incident in December that caused burst pipes and power outages.
8,000 customers in two counties have received water, but thousands more are enduring their fifth day without water.
Liberal Democratic Party leader Sir Ed David In an exchange during Prime Minister’s Questions on Wednesday, SEW called for its license to be revoked for failing “time and time again”.
He said: “Homes, pensioners, schools, care homes and businesses have been without water since Saturday and the water company bosses involved are now accused of misleading parliament. Time and time again South East Water has failed its customers. So will the government immediately revoke their license?”
Sir Keir responded that the situation was “completely unacceptable”.
He said: “He wants to know whether ministers are hosting emergency meetings every day to hold companies to account to deliver the changes that are urgently needed in all the areas he mentioned.
“We have also doubled compensation rates for individuals and businesses, we are absolutely clear that companies must urgently invest in infrastructure and we will publish a water white paper in due course.”
Kent County Council (KCC) said the vast majority of schools will be open on Wednesday, but some may close early if there is a shortage of water.
West Sussex County Council confirmed that some schools in Sussex will remain closed today.
Matthew Dean, incident manager at South East Water, said: “Once again we are very sorry to all of our customers who have been affected.
“We know and understand how difficult it is to be without water for such a long time and how difficult this makes daily life.”
In a similar incident last month, 24,000 properties in and around Tunbridge Wells, Kent, were left without drinking water for nearly two weeks.
SEW chief executive David Hinton was grilled by MPs last week over his company’s handling of the crisis.
Tuesday, Alistair CarmichaelThe chairman of parliament’s environment, food and rural affairs committee said he and his colleagues remained “deeply skeptical” of SEW’s version of events presented to MPs last week.
He said they planned to recall Mr Hinton and SEW chairman Chris Train to provide further evidence to the committee.
Tunbridge Wells Lib Dem MP Mike Martin has been calling for Hinton to resign for more than a month.
Other politicians have also expressed their displeasure, with KCC leader Linden Kemkaran saying on Tuesday that “clear heads have to come” due to the ongoing power outage.
A spokesman for SEW said: “We have fully complied with the Environment, Food and Rural Affairs Committee’s request for information to date and we will continue to provide any further information requested.
“This will include attending any further meetings required.”
The company said supplies will continue to be returned to people in Kent and Sussex throughout the day.
Most of those still affected are east grinsted, east sussexapproximately 11,500 properties are still without water.
Bottled water stations remain in place in Tunbridge Wells, East Grinstead and Maidstone, details of locations can be found on the SEW website.