Thames Water drifts closer to temporary nationalisation after Environment Secretary Emma Reynolds deemed creditors’ rescue offer inadequate.

Reynolds wrote to Ofwat, warning the proposal would burden consumers unduly. The Times first flagged the move, signalling a shift in the government’s stance toward the struggling utility.

With the deal rejected, investors face uncertainty over the company’s valuation and future cash flow, while regulators brace for possible state takeover.

The episode underscores the fragility of the UK water sector and the government’s willingness to step in when market solutions falter.