Ministers stepping up preparations for renationalisation of Thames Water

The environment secretary, Steve Reed, has said the government is stepping up preparations for temporary nationalisation of Thames Water, indicating it will reject pleas from the company’s creditors for leniency from fines and penalties.

Thames Water’s largest creditors control the utility and have made a bid to cut some of its debts and provide £5.3bn in new funding to try to turn it around.

However, the creditors have said their plan needs considerable leniency from Ofwat, the government’s water regulator for England and Wales, and the Environment Agency over fines for environmental failings. The Guardian this month revealed that the creditors had asked for immunity from prosecution for serious environmental crimes in return for taking on the company.

Reed on Thursday told parliament that Thames Water must meet its statutory obligations, after being asked about possible “regulatory easements”.

“Thames Water must meet its statutory and regulatory obligations to their customers and to the environment,” he said. “It is only right that the company is subject to the same consequences as any other water company.

“The company remains financially stable, but we’ve stepped up our preparations and stand ready for all eventualities, as I’ve said before, including special administration regime if that were to become necessary.”

More details soon …