Servicemen and firefighters were battling to protect the electricity supplies of half a million people last night as the highest flood waters in memory continued to rise.

The Government announced an independent inquiry as water levels in the Thames and the Severn exceeded those of the devastating floods of 1947 and were forecast to rise to 20ft (6m) higher than normal.

More than 10,000 families have been left homeless in the West Country and Thames Valley over the past four days and thousands of others have been told to leave their homes as a mass of water surges down river. Electricity supplies to 50,000 homes have been cut and 150,000 homes have been left without water.

The Times was told last night that the utility companies were warned by the Government seven years ago that they needed to make key facilities flood-proof to protect supplies. The Castlemeads power station near Tewkesbury, Gloucestershire, was shut down yesterday morning, however, leaving more than 50,000 homes without electricity. Supplies to a further 500,000 homes were under threat as a 250-strong force of military personnel and firefighters attempted to prevent rising waters overwhelming the Walham substation.

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There was a glimmer of hope last night when the Environment Agency said that the Severn appeared to have peaked two inches below the level that would have overwhelmed the substation. An agency spokesman warned, however, that it was still a “dangerous situation”.

The level of the Thames in Oxford may not peak until early Wednesday. Eight severe flood warnings and 50 other flood warnings remained in place last night as further rain added to the misery. Emergency planning teams met in Cambridgeshire after a flood warning was placed on the Great Ouse and the police prepared for possible floods around St Neots.

Hundreds more troops have been put on standby to help the police and fire services to rescue trapped families and provide humanitarian aid to villages that have been cut off since Friday night. Defence sources said that regional commanders were working at police headquarters in the worst-affected areas and providing troops and equipment whenever requested.

More than 350,000 people in Gloucester were told that they would be left without water after a treatment plant was overwhelmed by the floods. The police were called to guard supplies of bottled water at supermarkets after fights between customers. Severn Trent Water said last night that the households could be without water for up to two weeks.

Elliott Morley, Floods Minister from 1997 until last year, told The Times that he had been assured by the utility industries that key sites would be flood-proofed. “I remember previous flooding incidents where substations were vulnerable and there were power cuts,” Mr Morley said. “We really must now ensure that key installations are flood-proof so we do not descend into chaos every time there is some flooding.”

The utility companies had also been asked by the former Department of Trade and Industry, now the Department for Business, Enterprise and Regulation, to review the robustness of their sites against a one-in-a-hundred risk of flooding.

Nick Goodall, chief executive of the Energy Networks Association, which represents the nine power companies and the National Grid, said: “The companies are working to identify areas prone to flooding. This work is feeding into the companies’ network replacement plans, but this work is only possible with planning consent and regulatory approval.”

Gordon Brown, who visited Gloucestershire briefly yesterday, said that planning had to presume more extreme weather conditions. He said that a review would have to consider the siting of infrastructure because of the impact on water and electricity supplies. The review of the emergency in the West Country and last month’s floods in Yorkshire would have to cover the location of big constructions, drainage and flood defences.

Mr Brown defended the response of the Government and authorities. He said that funds to tackle the problem had risen from £300 million to £600 million and now to £800 million.

Peter Ainsworth, the Tory environment spokesman, said: “These events are increasing in ferocity and our infrastructure has to catch up with it.”