Thames Water lenders offer ‘golden share’ to avoid nationalisation

Thames Water’s main creditors are offering the government a “golden share” and more control to local authorities to stop the troubled provider from being nationalised.

The government has recently rejected a bailout proposal, the BBC understands, as are the creditors. Preparation of legal exam If the new Andy Burnham-led government takes the company into public hands.

In his first speech as prime minister on Monday, Burnham said he wanted to see more public control of “the essentials of life”.

The new proposal would see local authorities take a bigger stake in the company, similar to the relationship between United Utilities and Greater Manchester agreed when Burnham was mayor of the city.

Creditors consortium London & Valley Water (L&VW) has already proposed a £10bn deal to prevent Thames Water from going into administration. It involves canceling about half of the debt and injecting new cash to pay off future pollution fines.

It was the deal. It was rejected by the government in June.At the time, Environment Secretary Emma Reynolds said it did not do enough for consumers or the environment.

Sources close to the new deal said the lenders have doubled down on the previous offer with hundreds of millions in new money. The golden ratio gives the power to veto government decisions.

The government has been contacted for comment.

L&VW said on Tuesday that the new offer is a “material improvement” over the old one and will benefit customers.

A spokesman said: “We continue to believe that L&VW’s plan is the fastest and safest way yet to solve Thames Water’s complex problems and improve outcomes for customers and the environment.”

The new deal aims to achieve this without government funding and at the expense of taxpayers, he said.

Fears that Thames Water could run out first surfaced three years ago and it recently warned that it could run out of money by November.

The company, which provides water and waste water services to 16 million people across London and parts of southern England, was fined £122.7m last year, the largest ever fined by industry regulator Ofwat.

Sources close to the lenders have previously told the BBC that they will pursue full repayment of outstanding debt as before when full citizenship is granted, which could leave the government with a multi-billion pound bill.

Families will still have potable water and sewer service if the company is overwhelmed.