Qandil said the dam under construction on the major Nile River tributary will adversely affect Egypt's share of water and compromise its ability to generate hydroelectric power, Daily News Egypt reported.
Qandil called the issue "a matter of life or death" and a "high-level national security issue" when he addressed the country's Shura Council.
The prime minister outlined a course of action Cairo would take both domestically and through foreign policy, the newspaper said.
Qandil said the Egyptian government needed to enact policies encouraging efficiency in water consumption, such as using modern irrigation methods, developing a new water distribution system and avoiding waste of water resources.
Qandil said Egypt wants to strengthen its ties with Nile Basin countries based on "mutual confidence-building." The Nile, he said, is an area of opportunity for cooperation, not conflict, the Daily News said.
Egypt's annual share of 72 billion cubic yards of water was agreed to when the country's population was 20 million. Egypt's population could reach 150 million by 2050.
Egyptian Foreign Affairs Minister Mohamed Kamel Amr told reporters Sunday Egypt is keen to maintain strong relations with Ethiopia, but would not abandon its rights to its share of Nile water.
"No Nile, no Egypt," Amr said.
President Mohamed Morsi was expected to address the current issues situation Monday evening at a conference called by Islamist parties dealing with issues concerning the Nile.