Abstract: Dielectric properties of nano-confined water are important in several areas of science, i.e., it is relevant in the dielectric double layer that exists in practically all heterogeneous fluid-based systems. Molecular dynamics simulations are used to predict the in-plane dielectric properties of confined water in planar channels of width ranging from sub-nanometer to bulk. Because of suppressed rotational degrees of freedom near the confining walls, the dipole of the water molecules tends to be aligned parallel to the walls, which results in a strongly enhanced in-plane dielectric constant (epsilon (parallel to)) reaching values of about 120 for channels with height 8 angstrom < h < 10 angstrom. With the increase in the width of the channel, we predict that epsilon (parallel to) decreases nonlinearly and reaches the bulk value for h > 70 angstrom. A stratified continuum model is proposed that reproduces the h > 10 angstrom dependence of epsilon (parallel to). For sub-nanometer height channels, abnormal behavior of epsilon (parallel to) is found with two orders of magnitude reduction of epsilon (parallel to) around h similar to 7.5 angstrom, which is attributed to the formation of a particular ice phase that exhibits long-time (similar to mu s) stable ferroelectricity. This is of particular importance for the understanding of the influence of confined water on the functioning of biological systems.