Under new proposals, a variety of smaller schemes to improve existing infrastructure and build desalination plants would provide 1,063 cubic hectometers of water - or just under three percent of Spain's consumption - much of it for agriculture and tourism along the Mediterranean coast.

"Sea water, experts tell us, is the water of the future for humanity because continental fresh water will increasingly suffer from problems of scarcity, pollution and supply," Narbona told a news conference, saying Spain aimed to be at the vanguard of desalination techniques.

Spain, which suffers annual water shortages, has been using the technology for 30 years and has 700 such plants - making it the world's fifth highest consumer.

The new program will cost an estimated 3.8 billion euros. Spain's proposals received a warm welcome from EU Environment Commissioner Margot Wallstrom and Madrid hopes the European Union will cover up to 1.26 billion euros of its cost.

The first water under the new scheme is expected to flow in 2005, the minister said. To accompany the plan, the government will launch a campaign to educate Spaniards on the importance of conserving water.

It will also attempt to classify more accurately how water is used in Spain, one of Europe's most arid countries where summer demand is swelled by millions of tourists who pack its sweltering coastal resorts.

Under the new scheme, water will be priced according to its intended use: farmers will face the lowest charges, with industry paying a little more and tourist facilities and golf courses paying the most.