Backers pull plug on £4bn Thames deal

Perilous position...rescue deal collapses

- By Steph Spyro

THE future of Thames Water was in doubt yesterday when a US private equity giant pulled out of a £4billion deal to buy a stake in the troubled supplier.

Investment giant KKR abandoned its offer to rescue the stricken company days after talks took place involving one of its co-founders and Downing Street officials, it is understood.

Britain's biggest water supplier, which has 16 million customers, chose KKR at the end of March to be its preferred bidder under plans to invest around £4billion of equity.

KKR's withdrawal now raises the spectre of a temporary government nationalisation of Thames Water once more, should it fail to secure a rescue deal.