Thames Water is on the cusp of being placed in temporary public ownership after the government raised concern with a proposed £10bn rescue by its lenders. It was reported last night that the environment secretary Emma Reynolds had outlined a number of concerns to the industry regulator Ofwat ahead of
Mauricio Alencar
Tuesday 16 June 2026 9:32 am
Thames Water is on the cusp of being placed in temporary public ownership after the government raised concern with a proposed £10bn rescue by its lenders.
It was reported last night that the environment secretary Emma Reynolds had outlined a number of concerns to the industry regulator Ofwat ahead of a final decision on the creditors’ plan.
She called a rescue plan for the embattled water company “weak” and warned that the government stood ready to take control of it.
A spokesperson for the Department for Environment, Food & Rural Affairs (Defra) said: “Our priority is protecting customers and the environment”.
A government spokesman told the BBC that the offer did not support users.
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It now means that Thames Water could be placed into a special administration regime(SAR), a type of insolvency agreement reserved for monopolies, where a single company is the sole supplier of a service or goods. It was used for handling investments after the collapse of Lehman Brothers in 2008 and for an energy company, Bulb, that supplies gas and electricity to 1.5m UK customers.
Thames Water at risk of nationalisation
Thames Water serves around 16m customers, mostly around London and parts of south east England.
Read more Thames Water eyes return to London Stock Exchange while Pennon back in profit
Earlier this year, the consortium of creditors London & Valley – which include investment and private equity giants such as Elliott Management, Silver Point Capital and Invesco – had offered the government a “best and final” offer.
It offered around £3.35bn in equity investment plus £6.55bn in debt financing.
The investment would cover millions of pounds in outstanding fines for pollution from Ofwat.
Labour leader hopeful Andy Burnham has said he would support Thames Water being taken into public ownership yet speculation over the SAR regime has fuelled concern that more burdens could be placed on UK taxpayers.
Thames Water’s debt pile has reached £20bn and it has amassed over £300m in fines since the pandemic over sewage treatment, wastewater and paying out shareholder dividends.
An SAR regime could allow investors to write off losses and for the company to be sold without its existing debt pile although it could thwart wider government plans to boost infrastructure.
Thames Water has been fighting to beat a financial collapse for at least two years, with City giant KKR pulling out of a takeover deal last year.
Read more Thames Water, energy grid, rent prices: Burnham drums up public control agenda
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