Reed: Nationalising Thames Water isn't the right answer

Nationalisation of struggling Thames Water is "not the answer", environment secretary Steve Reed has warned after a private equity giant pulled out of a £4bn rescue deal, throwing the company's future into doubt.

- ALASTAIR JAMIESON

A bailout of the debt-laden utility would take money away from the NHS and other public services, he said. Thames Water is about £19bn in debt, and MPs were told last month that at one point this year it had about five weeks’ worth of cash left before going bust.

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 £4bn of new equity. But the firm said yesterday that KKR was no longer “in a position to proceed” and that its status as preferred bidder had lapsed.

At the despatch box, Conservative shadow environment secretary Victoria Atkins accused ministers of having “talked themselves out of” a rescue plan.

Mr Reed told MPs: “The government stands ready for any eventuality and will take action as required. We are not looking at nationalisation because it would cost over £100bn of public money that would have had to be taken away from other public services like the National Health Service to be given to the owners of the water companies.