A timely agreement on Thames’ restructuring unlikely

(by Verity Mitchell)

The creditors’ rescue package for Thames Water, which is said to be near to agreement, has been thrown into disarray by the potential change in prime minister.

Reports have suggested that civil servants are concerned that there is no clarity from the Government about the direction of travel for Thames, and that Defra officials believe that the leadership uncertainty may prevent acceptance of the London & Valley Consortium’s proposals.

A government spokesman reaffirmed that special administration remains one of a number of potential eventualities.

The Consortium said that any further delays will create uncertainty for employees and the supply chain, and make the turnaround of Thames even more challenging.

The leadership challenge has galvanised fresh debate on the future of Thames within the Labour Party.