While even using a bath at home could be as effective as a specialist birthing pool, Nice said that expanding the use of water births could improve childbirth for thousands of women.
"There is a perception that water is just nice," says Dr Julia Sanders, a consultant midwife and member of the group, which drew up the guidance. "But it is the most effective form of pain relief barring an epidural in labor. I would like to see more women using water and fewer women using the types of pain relief that are less effective."
Nice also stressed that clinical intervention should not be offered or advised when labor was progressing normally and the woman and baby were well. Once a woman was in established labor, she should receive supportive one-to-one care.
While the guidance is expected to mean longer labors for some it could also mean fewer medical interventions, which can result in more painful and complicated labors.
"Continuous, supportive, one-to-one care and emotional support during labor is what women want and expect," Sanders opines.
"We know that this level of care during labor reduces the numbers of women needing a caesarean section or instrumental birth - such as forceps", she added.
Around 600,000 women give birth in England and Wales each year and good communication and respect for mothers was crucial, the report stressed.
Nice recommend medical staff greet women in labor with a smile and knock before entering a room. Women should be asked permission before all procedures and observations.
Andrea Sutcliffe, Nice's deputy chief executive, says the guidelines are aimed to improve childbirth across the country.
"We want to make sure every woman's experience of birth is as good as it can be and have used the best available evidence to set a national standard on how midwives and doctors can make labor a positive experience for women.
"Currently, the care of women in labor may be varied across the country - these guidelines set the standards of care that every woman should receive." she was quoted.
According to Maureen Treadwell, of the support group Birth Trauma Association, better levels of information and communication would mean women were less likely to feel "victims of events".
"We need good communication to ensure that women are treated with dignity, courtesy and respect. This is about women making choices that are right for them," she stressed.