Bottled water served with meals in the British capital costs 500 times more than tap water and is 300 times more damaging to the environment, Mayor Ken Livingstone claimed.
Launching his "London on Tap" blitz on Tuesday, Livingstone said using fewer bottles would help climate change.
Bottled water, he added, left a higher carbon footprint – some imported brands travel from as far as New Zealand – and he urged consumers not to be embarrassed about asking for tap water in restaurants.
"We need to do everything we can to lower these (carbon) emissions," he told reporters.
"There is no need to buy the expensive bottled water that has become a bit of a fad in recent years."
His announcement, the latest in a line of green initiatives unveiled in the run-up to May elections in which Livingstone is standing, was backed by green and consumer groups and by London utility company Thames Water.
It follows comments by British Environment Minister Phil Woolas in a BBC documentary program on Monday in which he condemned the bottled water industry as "daft" and "morally unacceptable."
Figures show the bottled water industry is worth about 1.7 billion pounds ($3.31 billion) annually in Britain and accounts for almost one in five UK soft drinks sales, with six million liters drunk every day.
"There is no health advantage in drinking bottled water instead of water from the tap," said the chairwoman of the Consumer Council for Water, Yve Buckland, in a statement.
The British Hospitality Association welcomed the policy's environmental ambitions but questioned Livingstone's claims that customers were embarrassed to ask for tap water.
"It is entirely a question of choice – if they want bottled water they can ask for it, they will get whatever," said spokesman Miles Quest. "I don't really see what all the fuss is about."
A spokeswoman for the British Bottled Water Producers (BBWP) was unavailable for comment on the Mayor's plans. But in a statement to the BBC Panorama program she rejected suggestions that bottled water was bad for the environment.
About three-quarters of all bottles sold in the country were manufactured in Britain and they had to use plastic for safety and hygienic reasons.
"For people concerned with helping the environment... buying British-sourced bottled water is a sound and logical choice," she added.