Plan to renationalise Thames Water is being stepped up, says minister

The environment secretary, Steve Reed, said yesterday that the government was stepping up preparations for the temporary nationalisation of Thames Water, indicating it would reject pleas from the company's creditors for leniency over fines and penalties.

- Jasper Jolly

Thames Water's largest creditors control the utility, and have made an effort 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 the water regulator, Ofwat, 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 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. It remains financially stable, but we've stepped up our preparations and stand ready for all eventualities... including special administration regime [SAR] if that were to become necessary."