Thames Water paid £2.5m in bonuses from emergency loan of £3bn

Thames Water paid almost £2.5m to senior managers from an emergency loan that was meant to be used to keep the failing utilities company afloat - and has refused to claw back the payments, newly released documents reveal.

- Helena Horton Jasper Jolly

The struggling water supplier paid bonuses totalling £2.46m to 21 managers on 30 April.

The managers are due to receive the same amount again in December, and a further £10.8m collectively next June, the chair of Thames Water, Sir Adrian Montague, said in a letter to the environment select committee.

The company paused its management retention plan (MRP) in May after the Guardian revealed Montague had wrongly told MPs that creditors had “insisted” on the payments.

The environment secretary, Steve Reed, had been asked to claw back the payments.

However, Montague said the board did not intend to recover the money, and suggested the two further tranches of bonuses could still be paid.

In a letter to the committee’s chair, Alistair Carmichael, sent in June and published on Wednesday, Montague wrote: “The MRP was and remains paused. The board has not taken further decisions on the MRP at this stage.”

Thames is in a desperate race to raise funds and persuade the water regulator to let it off hundreds of millions of pounds of fines or risk being renationalised.