OK, as the water is actually there...you probably have a thermostat problem - this thing opens automatically when the engine reaches 90 deg C and allows the cooling water to circulate through the radiator, keeping the water temperature constant.
Or - the temperature gauge may just have gone faulty!
To sort of check the thermostat, when the temperature gauge reads very hot, feel the surface of the radiator - chances are its still cool. This is not a guaranteed test though! Watch out for the electric cooling fan - they start automatically.
John
April 2009