Many areas of the Mediterranean, particularly islands and coastal zones suffer from droughts and water shortages which cause heavy impacts on economies, societies and the environment at local or regional scales. The project PRODIM aims at formulating a methodological framework to confront drought and water shortage through systematic application of principles of proactive planning. Specifically, the water shortage risk will be quantified, impacts of shortage to socioeconomic systems will be evaluated and levels of alert will be defined. Moreover, proactive plans to mitigate impacts will be addressed. To validate the methodology the project partners from Greece, Italy, Cyprus and Malta will refine the proposed framework on selected case studies. First, past research results of EU and international projects will be analysed and integrated into a comprehensive methodology for identification of drought and water shortage prone areas. Second, a knowledge based system (KBS) will be built for estimating impacts of water shortages on the economy, the society and the environment of the areas under threat. The system will integrate accumulated experience and knowledge (EU legal framework, databases, software) of a large number of EU relative projects. It will use both conventional and satellite data and will address a variety of technical measures to mitigate water shortage risk (planning and operation of hydraulic works, use of non-conventional water resources, water demand management, etc). Best practices will be evaluated through a multi-criteria approach comprising environmental, social and economic factors. Third, a methodology will be formulated for preparing a Strategic Water Shortage Preparedness Plan (SWSPP) which will assist each region of interest to improve its institutional capacity for confronting water shortage. This will address usage of KBS, formulation of guidelines for defining stakeholders, their responsibilities and courses of action during and beyond critical periods, and the decision process at the regional, national and trans-national levels. Emphasis will be given to the long term improvement of water availability-demand balance and subsequent socioeconomic impacts. Additionally, for drought phenomena under evolution, an Emergency Plan will be formulated in an attempt to integrate both conventional reactive management and modern proactive management ideas. Its main difference from SWSPP regarding scientific procedures lies in the exploitation of real-time (or near real-time) information. Finally, the above plans will be implemented to the selected case studies so as to validate the methodology proposed within a feedback loop, which will allow plan refinement. The projects outputs (software packages, reports) will be valuable in assisting sustainable water management in Mediterranean countries while supporting fulfilment of WFD goals (protection of water resources and aquatic ecosystems) in case of water shortage periods.