Any water in fuel will result in a drop in performance as water molecules will diffuse throughout the fuel in your tank - so when fired into the cylinder the actual fuel ammount will be reduced as some of the molecules are replaced by water - this can ruin fuel mix, as well as inhibiting combustion
Long term, water can cause corrosion on the engine internals such as the piston which would result in power loss or potential compenent failure
You can get filters which seperate off water molecules from the hydrocrabons in fuel, but in all honesty, if you suspect that your fuel has been contaminated with water, dirt etc. throw it away and get fresh stuff
May cost you £10-£20 to replace, but better than hundreds on a rebuild because the engine was damaged
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