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.
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 added: "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.
How did they do?
- Northumbria Water: Maximum four star rating, up from two stars in 2017
- Anglian Water: Three stars, same as 2017
- Severn Trent Water: Three stars, dropped from four stars in 2017
- Thames Water: Three stars, same as 2017
- United Utilities: Three stars, dropped from four stars in 2017
- Wessex Water: Three stars, dropped from four stars in 2017
- Southern Water: Two stars, dropped from three stars in 2017
- South West Water: Two stars, same as 2017, with a red rating for pollution
- Yorkshire Water: Two stars, dropped from three stars in 2017
"As the Environment Agency acknowledges, the situation is never black and white," Mr Roberts 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".
Severn Trent Water said it was "disappointed" with its rating - having achieved the top mark in 2013, 2015 and 2017 - with figures masking "real successes" such as the reintroduction of shad, a type of fish sensitive to pollution, on the Severn.
South West Water said it achieved its "best ever wastewater performance" in 2018 but recognised there was "still more to do", although it remains "on track to deliver 2020 targets".
A Wessex Water spokesman said the firm had "led the way" in collaborating with farmers and others "to protect watercourses" and would "continue to work hard to reduce our environmental impact".
He said about 35% of the recorded pollutions on the company's network in 2018 was due to "sewer misuse", adding: "We'll keep banging the drum about the damage caused by flushing wet wipes or pouring cooking fat down the sink."
Yorkshire Water said an increase in the number of serious pollution incidents was the main reason for its rating with the level of performance "absolutely not reflective of the company's ambition to protect the environment".
A spokesman said measures had already been introduced, resulting in a 36% drop in pollution so far in 2019 compared to the same period last year.