Environment Secretary Emma Reynolds has flagged that the current £10 billion rescue plan may not fully protect customers or the environment, prompting renewed urgency and creditor concessions.

Thames Water serves about 16 million customers in London and the Thames Valley, and its debt burden has made its future a priority for Burnham’s administration.

A prior rescue deal with US private equity firm KKR collapsed last May, prompting creditors to rethink options and push for more concessions to limit taxpayer exposure.

Turnaround specialist Mike McTighe says investors are ready to recapitalise Thames Water, restore investment-grade status, and work with government toward enhanced public oversight.

He has signalled a push for greater public control of Thames Water, a stance that could shape negotiations as he takes office.

Burnham is weighing a temporary nationalisation or special administration regime (SAR) for Thames Water, a move that would shift costs to taxpayers and is estimated to cost about £2 billion to keep the company afloat.

The prime minister-designate has advocated stronger public oversight of essential utilities, boosting talk of a SAR to manage the company's finances.

Creditors are open to further concessions to their rescue plan to reduce taxpayer burden while addressing aging infrastructure and protecting customers.

Discussions are likely to include adjustments to the rescue package to avoid taxpayer costs while ensuring customer protections.

Creditors are preparing for multiple outcomes, including legal action, and have brought in advisors to strengthen their case in the event of nationalisation or other restructurings.

A consortium of about 100 institutional investors, led by London & Valley Water, holding around £17 billion of Thames Water’s £21 billion debt, is pursuing a rescue and is open to greater public control but not full national ownership.

Thames Water’s latest annual report shows liquidity uncertainty, with a rescue by creditors viewed as the viable path to avoid SAR.