Thames Water’s lenders, led by Silver Point Capital and Elliott Management, will offer a “golden share” to the UK government as part of an improved takeover bid, aiming to avoid nationalisation under new Prime Minister Andy Burnham.

The creditor group, which holds about £17bn of the utility’s debt, proposes supervisory structures giving ministers oversight similar to that at Royal Mail, plus representation for local authorities. They also pledge to reinvest all profits and keep customer bills frozen at the level set by Ofwat through 2030.

The lenders previously offered to inject £3.35bn of new equity and £3.25bn of fresh debt, and seek a waiver of penalties until March 2030 in exchange for an £800mn payment. However, Ofwat has yet to approve the deal, and Thames Water, serving 16mn customers in London, could run out of cash by October, prompting a possible special administration regime.