New model potentials are constructed for Na + H~O and H20-H20, using quantum mechanical calculations of the monomer wavefunctions. One parameter in each model potential is fitted to experimental dimer properties. The resulting Na+-H20 potential is consistent with published thermodynamic and ab initio data, and the H~O-H20 potential reproduces the structure and energy of the water dimer at equilibrium, and the second virial coefficient of steam, within experimental uncertainties. The donor-acceptor interchange tunnelling pathway on the water dimer potential energy surface has a lower energy barrier than the acceptor-acceptor interchange, in agreement with recent spectroscopic studies. When a simple non-additive induction potential is included, calculated thermodynamic properties of solvated sodium ions are in agreement with experimental data. For small clusters in the gas phase, the first solvation shell of the sodium ion is predicted to contain four water molecules.