The Leeds-Liverpool Canal is to be partially closed after being hit by the driest summer in more than 80 years.
The crisis comes as boat hire businesses along the waterway face their busiest time of year.
It will leave narrowboaters marooned from some of the most stunning countryside along the 127-mile canal.
There are even fears vessels could become stuck in places if the water gets much lower.
British Waterways blames the driest first six months of the year since 1929 and the seconddriest in a century.
Winterburn reservoir, near Skipton, which feeds the Skipton and Gargrave section of the canal, is holding only a fraction of its capacity.
And the six other reservoirs which feed the length of the canal are expected to be down to ten per cent of their capacity by the start of next month.
The towpath is to remain open but British Waterways is warning people to be extra careful as water levels continue to fall.
People who run narrowboat firms along the canal fear turnover will be hit.
They have criticised British Waterways for failing to plug leaks quickly enough.
Lucy Poulter, of Pennine Boats in Skipton, said: “It’s been leaking at Barnoldswick for months and they have done nothing. That is one way of saving water which would have helped.”
Troy Dortona, who runs Snaygill Boats, near Skipton, with his wife Jo, said: “There are some big leaks up and down the canal I've been told about which need fixing.
“We will be losing money, especially from the people who come from Lancashire and use temporary moorings here over the summer. They won’t be able to reach us.”
Trevor Roberts, who runs canalboat business Dream Achievers at Shipley, said he was concerned about the impact it would have on business.
“We have been trying to save water by not going through the locks,” he said. “But on the positive side people will have to move down towards Bradford and realise how beautiful it is, with the Five Rise Locks and the World Heritage Site of Saltaire.”
Judy Holland, of Silsden, who has a cruiser said: “British Waterways do the best they can with limited resources.”
Vince Moran, Brtish Waterways operations director, said: “We’ve been doing all we can over the last three months to conserve water levels.
“Unless we have significant rainfall in the next fortnight we will be forced to put in ‘stop’ planks and shut off the water supply from seven reservoirs from August 2.”