Thames Water lenders submit rescue plan to stave off collapse

Thames Water's lenders have submitted a new rescue plan to prevent the UK's largest water company from collapsing.

London & Valley Water, a consortium of large financial institutions and investors, has submitted proposals which include writing off about a third of the company's near £20bn debt pile and investing to improve services.

The future of Thames has been in the balance since fears the company could collapse first emerged more than two years ago.

But the firm's investors said its plan would rebuild the company without the need for any taxpayer funding or government support.

The government has been on standby to supervise a form of temporary nationalisation as Thames has sought to secure fresh investment.

The company serves about a quarter of the UK's population, mostly across London and parts of southern England, and employs 8,000 people.

But it has faced heavy criticism over its performance in recent years over a series of sewage discharges and pipe leaks. In May, it was handed a £122.7m fine, the biggest ever issued by the water industry regulator, for breaching rules on sewage spills and shareholder payouts.

London and Valley Water said on Thursday that its plan was the "fastest and most reliable route" to turn around Thames, clean up waterways and rebuild public trust.

Investors said they would inject £14bn to upgrade its water and waste systems over the next five years.