A new European Union (EU) ruling states that bottled water manufacturers can face 2 year jail term if they describe that drinking water can prevent dehydration.
However, a leading British producer of bottled water has refused to comply with the new ruling.
Highland Spring described the edict as "ridiculous" and vowed to not to bow to the threat of prosecution.
The company, based in Blackford, Perthshire, makes the claim in promotional material on its website.
But following a three-year investigation, Brussels officials concluded that such a statement could not be proven and banned it.
"It is right to mock this EU directive which is based on a legal technicality and just another typical example of Brussels bureaucracy," the Telegraph quoted Highland Spring chief executive Les Montgomery as saying.
"It is a ridiculous ruling when we are in the midst of the current euro crisis: Everyone knows water is essential for health.
"As far as we are concerned we will continue to champion bottled water as one of the healthiest drinks available and the only beverage you need to hydrate as part of a healthy lifestyle," Montgomery stated.
The ruling came after two German professors who advise food manufacturers on how to advertise their products applied for the right to use the claim on labels in order to test EU advertising rules.
They wanted to state that "regular consumption of significant amounts of water can reduce the risk of development of dehydration" but the request was refused, meaning that the ban will become law.
The company was applauded for refusing to enforce the latest EU regulation.
"I applaud Highland Spring for their robust and entirely reasonable stand," said UK Independence Party deputy leader, MEP Paul Nuttall.
"British business should not be cowed by the idiocies of Brussels and we in this country should support them," he added.