This paper presents a step-by-step methodological approach for the development and
 evaluation of strategies for water deficient regions. The primary focus of the approach
 followed was the mitigation of water stress, while applying the principles of Integrated
 Water Resources Management and the EU Water Framework Directive.
 The participation of Stakeholders and end-users through consultations was a key point in
 the methodology followed. Stakeholders and actors were approached and their opinions
 on Water Management were collected and integrated into a list of measures and
 instruments suited and available for implementation, forming the basic assumptions
 governing the strategy formulation process for a region. Comprehensive scenarios were
 developed and examined for each of the selected options, through a prototype Decision
 Support System (WSM DSS), in order to obtain an initial ranking with regard to their
 suitability and performance. Then, the strategy formulation involved the integration of
 options on a regional basis in a set timeframe, based on their previous estimated
 performance and technical considerations with regard to their implementation.
 To achieve the set-out goals and principles two distinct strategies were evaluated and
 compared, one reflecting the traditional and current practices and policies, and one
 closely following the principles of Integrated Water Resources Management (IWRM). The
 developed Strategies were evaluated against each other and against the reference state
 of the water system, using a set of appropriate indicators for performance, cost,
 environmental and social impacts. Alternative pricing schemes were also explored in
 order to achieve a desired level of cost recovery for water services, and determine its
 effect on Strategy implementation. The developed strategies were re-examined and
 adjusted on the basis of the cost recovery structures, to account for the effects of price
 elasticities, and an overall evaluation was obtained enabling a final comparison.
 The methodology is illustrated through an exemplary application for the island of Paros,
 Greece. On the basis of the perceptions of different stakeholders, alternative water
 management strategies were developed and evaluated, and recommendations were
 made towards the mitigation of impacts caused by the high temporal water imbalance in
 the island.