A method for determination of ab initio group model potentials, with the intention of describing the effects of a whole molecule or a chemical group within a density functional theory framework, is reported. The one-electron part of the Kohn-Sham equations is modified by incorporation of a Coulomb operator, which accounts for the classical electron interaction arising from the group. Exchange and correlation effects are introduced by a suitable modification of the exchange-correlation functionals. The strong orthogonality condition, usually required by the theory of separability of many electron systems, is written in terms of first order reduced density matrices. In order to check the method a group model potential for H2O (environment) was obtained and employed in the calculation of HF ... H2O and H2O ... H2O complexes using several functionals. Equilibrium intergroup distances and binding energies are compared with all-electron calculations.