The UK government will force major water utility takeovers to undergo national security screening, a move expected to block foreign acquisitions like CK Infrastructure's interest in Thames Water. The National Security Investment Act 2021 now explicitly includes water utilities among 17 sensitive sectors requiring pre-transaction scrutiny. This follows a 12-week consultation where businesses complained the rules were too opaque and broad. Chancellor Rachel Reeves aims to streamline AI regulation by removing commercially available systems from the mandatory screening list while keeping advanced AI under review. The changes, coming as soon as Thursday, target investors gaining control of water companies, potentially affecting Hong Kong-based CK Infrastructure's ambitions for Thames Water.

Officials stress the rules aren't targeted at specific countries but aim to protect critical infrastructure like water supplies from undue foreign influence.