The regulator must not go soft on Thames Water and risk a cosy bondholder stitch-up

Who wants to invest in Thames Water? Six parties have made proposals, the company said yesterday, adding that it hoped to have a financial restructuring deal on the table by the end of June.

- Nils Pratley

Five of the six plans involve write-downs for holders of the senior class A debt. Then came the vague - but crucial - bit. Most of the proposals "are conditional on further, and varying, regulatory support and accommodations being achieved".

What does that mean? The company will not explain what form of "support and accommodations" it has in mind, but a natural reading says this is a plea for special treatment.

If it's a naked attempt to bully ministers into overruling Ofwat on bills, it sounds like wishful thinking. Even for a government desperate not to see Thames enter special administration, AKA temporary nationalisation, loading even more pain onto consumers would be a capitulation too far.

The regulator's "final determination" last December - one that allowed a 35% rise in bills, rather than the 59% Thames wanted - was, as the name suggests, meant to allow no room for revision by Ofwat itself.