Recently, a controversy has come to light in literature regarding the structure of water in nonambient conditions. Disagreement is evident between the site-site pair correlation functions of water derived from neutron diffraction and those obtained by computer simulations which employ effective pairwise potentials to express the intermolecular interactions. In this paper the SCEMI method (self-consistent field for molecular interaction) followed by nonorthogonal CI (configuration interaction) calculations was used to determine a new water-water interaction potential, which is BSSE (basis set superposition error) free in an a priori fashion. Extensive calculations were performed on water dimer and trimer and a new parametrization of a NCC-like (Niesar-Corongiu-Clementi) potential was accomplished. This was employed in the molecular-dynamics simulation of water. The effect of temperature and density variations was examined. Acceptable agreement between site-site correlation functions derived from neutron diffraction data and from computer simulation was reached. In particular, a weakening of the hydrogen bonded structure was observed on approaching the critical point, which reproduces the experimental behavior. The simulations were performed using the MOTECC (modern techniques in computational chemistry) suite of programs. The present results show the importance of BSSE-free nonorthogonal orbitals in an accurate description of the intermolecular potential of water.