'Water Lily' was a British special forces undertaking by the Special Air Service in support of 'Husky' (i) (July 1943).

The undertaking was planned by Lieutenant Colonel William Stirling, and targeted the railway network in the area of Genoa in northern Italy. The origins of 'Water Lily' and contemporary 'Hawthorn' lay in desire of Stirling to support 'Husky' (i) with two close undertakings ('Narcissus' and 'Chestnut') and two more distant undertakings ('Water Lily' and 'Hawthorn'). All four of the operations failed to produce operationally or tactically useful results for what Stirling believed to be the Allied command structure’s lacklustre and unimaginative use of his command. Stirling was sure that a more concerted employment of the SAS would have led to operationally valuable results.

For the 'Avalanche' invasion of Italy, Stirling thus repeated his suggestions for a wide and well co-ordinated deployment of his regiment. In a series of hastily prepared plans, he proposed supporting conventional landings in the south of Italy via the dispatch of numerous small SAS teams to target the Italian mainland railway network and lines of communication, principally in the area bounded by La Spezia, Bologna and Florence. Nonetheless, limitations similar to those before the invasion of Sicily meant that only five small parties were dropped in support of the 'Avalanche' landings at Salerno. Deeply frustrated, Stirling argued that what was required was 'not five parties ill-equipped, but 50 or 100 parties with adequate equipment' to create an effective disruption of German communications and thereby isolate the beach-head on its landward side and delay the delivery of German reinforcements to combat the Allied formations in the beach-head.

Stirling argued that had this been done, German supply and reinforcement to Salerno 'by rail…would have been negligible. Telephone communication, power supplies and road transport would have been reduced to a state of chaos.' That the regiment was not deployed as such at this time was, however, a result of more than a lack of enthusiasm on the part of Allied Forces HQ: material constraints on aircraft were severe, intelligence about rear areas was scant, and the Italian partisans were only in their formative period.

With hindsight and an understanding of the problems associated with the deployment, supply and co-ordination of even a handful of small groups working in the depth of the German rear areas, it seems likely (assuming all parties could be equipped and deployed as intended) that following an initial impact, which may well have caused surprise and briefly impeded enemy communications, the effect of these groups would have been short-lived, would have been underexploited by other arms, and would have been suppressed swiftly with major losses to the SAS.