We demonstrate here that it is possible to calculate with reasonable accuracy the O-17-chemical shift for the gas-to-liquid phase change for water using density functional theory (DFT) and water clusters in which both cluster size and cooperative hydrogen bonding are taken into account. Cooperative hydrogen bonding in a highly structured, tetrahedrally symmetric environment results in O-17-chemical shifts sufficient to mimic the change from monomeric water in the gas phase to that in high-pressure ice. We also show that polarizable continuum models (PCM) using a self-consistent reaction field (SCRF) fail to predict adequately O-17-chemical shifts for water in the condensed liquid or solid phase, discussing this problem in terms of any solute-solvent system in which there is cooperative charge transfer. This is believed to be the first report analyzing the O-17-chemical shielding tensor behavior in water clusters explicitly as evidenced by electron density topology of the hydrogen bonds, NBO antibonding orbital occupancies, electric field gradients, and full electrostatic multipole analysis for the oxygen and hydrogen atoms, thus providing an insight into the failure of the polarizable continuum model to describe liquid water accurately.