Public outrage over low-flow shower heads has forced the Government to pull the suggestion from new energy saving rules.
Building and Construction Minister Shane Jones said the option of a six-litre-a-minute flow limit for showers would be scrapped after the public "unambiguously" rejected it.
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"There will not be a requirement - there will not even be an encouragement - for people to have six-litre-a-minute showers."
Mr Jones said the Government had never intended to made low-flow showers compulsory.
"Unfortunately, far too many people have construed the consultation document as an edict."
The Department of Building and Housing is consulting on water-heating rules to apply to new homes from February. Builders and plumbers would have had the choice of using an online calculator to meet the efficiency standards for hot water.
If they did not want to use the calculator, they could automatically comply by using a shower head that released six litres of water a minute (for homes bigger than 150sq m) or 7.5 litres a minute (for smaller homes).
Mr Jones said low-flow shower heads were one of a range of energy saving options.
"Obviously the six-litre option ain't going anywhere unless people themselves want to adopt it."
Rob Bolus, group head of engineering and technology at bathroom specialists Methven, said the bathroom industry agreed energy saving standards were needed. Heating water uses about a third of the average family's power bill.
But Mr Bolus said the Government would be better to encourage people to install more efficient water-heating systems by subsidising heat pumps, solar hot-water heating, and optional low-flow shower heads.
He said that if the Government did introduce a target water flow, it should follow the Australian limit of nine litres a minute.
Green Party co-leader Jeanette Fitzsimons said that if the option of six-litre showers was removed altogether, people building new homes would have fewer opportunities for meeting energy efficiency standards.
People might have to use more costly measures than a low-flow shower, she said.
Last week, some plumbers and builders complained that the online energy efficiency calculator for working out if a house met the new efficiency rules was too difficult to use.