Two protestors with masks in the shape of poo emojis. They are holding a sign which says 'Ofwat must say NO'. In the background of the sign, a pipe leaks sewage into a river.

24 Mar 2026

Thames Water is on the brink of financial collapse.

In a desperate bid to stave off Special Administration - and therefore protect their profits - a group of Thames Water’s creditors have been negotiating with Ofwat (the water regulator) to take control of the utility.

The creditors are promising to inject money into the utility in order to keep it afloat. In return, they’re asking to bend and break the rules in order to maximise their profits.

The creditors initially put forward a proposal in October, asking to pollute illegally until 2040.

Because of brilliant campaigners and supporters shining a light on just how outrageous this deal was, it didn't go ahead. An agreement was meant to be signed off by the end of 2025. Now it’s March 2026, and still no decision has been reached.

In a last ditch effort to keep hold of the utility, the creditors have now put forward another offer.

This time, they know just how furious the public will be at brazen attempts to pollute for profit. So they’ve decided to dress their proposal up in vague statements and obscure jargon. The creditors (who are calling themselves London and Valley Water) have written a press release about the deal. You can read it here.

But we know that - as ever - the public will see straight through it. This is simply more of the same: an attempt to extract as much money as possible at the direct expense of billpayers and our environment.

Here’s 5 reasons why the latest deal must not go ahead:

1) The creditors are trying to bribe Ofwat

  • “all outstanding fines would be paid, with L&VW making a significant up-front and ring-fenced investor and redress commitment, without recovery from customers [...] As a result, the Company would not be subject to the outcome delivery incentives regime during AMP8 [2025-2030]".

  • Translation: in return for an upfront payment, the creditors want 5 years of exemption from penalties.

  • In doing so, they would set a dangerous new precedent for the privatised water industry. Every single water company in England would want to set their own rules. To sign off on this deal would be to sign off on untold environmental destruction.

2) The creditors want to hold households and the regulator to ransom

  • "funding is conditioned on further engagement, prior to completion of the restructuring, with the Company's regulators on enforcement matters"

  • Translation: new money from the creditors is contingent on further discussions with the regulator about rules and regulations

  • 5 years of guaranteed environmental destruction is not enough: the creditors want indefinite headroom to pollute well into the future

3) The creditors are a group of US hedge-funds with a track record of polluting for profit

  • In order to give an appearance of legitimacy, the creditors have named themselves ‘London and Valley Water’

  • In reality, they are a group of US-based hedge funds, extracting money from our crumbling water system from afar

  • Elliott Management - one of these hedge funds - forced BP to reject renewables in favour of oil and gas

  • Because the shareholders have effectively walked away from the utility, the creditors hold de facto control. However, they have not been designated as Ultimate Controllers. As it stands, this group of profiteers are illegitimately controlling Thames Water in their own financial interests

4) The creditors want to sell the utility as soon as 2030

  • While dividend payouts are restricted, the sale of the utility is how the creditors will maximise their profits

  • This means that the creditors are not interested in the long-term efforts so desperately needed to fix our crumbling water system

  • The creditors just want to make as much money as possible by selling the company to new owners. It will be households and our environment which bear the consequences of this profit-driven short termism

5) This is not the best deal for the public purse

  • Under the terms of the deal, only 30% of existing debts to senior creditors would be written off

  • However, Special Administration would enable greater debt write-offs. The previous government’s plans under Project Timber involved a 40% debt haircut for some creditors. We could cut more.

Thames Water has broken the terms of its licence many times over. It’s time for this government to take it into Special Administration. From there, we can fight for permanent public ownership.

Say NO DEAL to the Thames Water creditors. Email your MP now.

Two protestors with masks in the shape of poo emojis. They are holding a sign which says 'Ofwat must say NO'. In the background of the sign, a pipe leaks sewage into a river.

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