A cross-party parliamentary committee has urged the immediate temporary state ownership of Thames Water, arguing the current creditor consortium lacks the public interest. The Environment, Food and Rural Affairs (EFRA) Committee recommended triggering the Special Administration Regime (SAR), calling the move "cost neutral" for the Treasury while protecting 16 million customers. MPs criticized the "opaque consortium" of over 100 hedge funds, questioning their suitability as owners of a critical resource. The committee warned that without intervention, Thames Water faces insolvency by Christmas. The damning report increases pressure on Prime Minister Andy Burnham, branding the decision a key test of his premiership. MPs argued the current lenders, operating as the London & Valley Water (L&VW) consortium, have prioritized debt interest over necessary operational improvements.

The committee highlighted that Thames Water has incurred nearly £2 billion in financing costs and advisory fees over 18 months. MPs accused senior lenders of keeping the company in limbo to reap millions in interest while negotiations drag on. The group also questioned the ownership structure, noting a discrepancy between creditors claimed as "economic owners" and Ofwat's stance on defunct shareholders. Given the creditors' short-term interests, MPs concluded the consortium is unlikely to deliver the swift turnaround the network requires. The report recommends rejecting proposals that cap financial penalties for sewage pollution.