THAMES Water will be exempted from England’s sewage pollution laws for 15 years under its creditors’ latest proposals to stave off nationalisation, announced today.

Financial institutions that effectively own Britain’s largest utility firm announced that they would commit to paying fines for pollution, as well as writing off more of their loans and investing more in the heavily-indebted company.

But they said “a full return to legal, regulatory and environmental compliance” under their plan would not be completed until at least the 2035-40 period. 

Creditors have been locked in talks with regulator Ofwat since May over acceptable terms for restructuring Thames Water, which has accrued huge debts over two decades.

Its owners have been criticised for paying out dividends without investing enough in its leaking pipes and malfunctioning treatment works.

Mike McTighe, proposed future chair of Thames Water under the terms of the non-legally binding plan, said: “There is a huge amount of work to be done to turn around Thames Water and deliver the improved service and environmental outcomes that customers and local communities deserve.

“From day one, we will inject billions in new investment, strengthen Thames Water’s balance sheet, transform the company for thousands of hard-working front-line staff and begin the delivery of an operational turnaround that puts 16 million customers and the environment first.

“Together with committed and experienced new investors, the collective focus of the new board under London & Valley Water’s plan will be on fixing the foundations, reducing pollution and rebuilding public trust so that by the end of this decade Thames Water can once again be a reliable, resilient, and responsible company.”

The alternative to a creditor-led turnaround plan is a special administration regime, whereby the water company would come under temporary government control to impose debt write-offs and find a buyer. 

GMB national officer Gary Carter said: “Any turnaround plan has to guarantee jobs, pay and pensions and clean up the environment. 

“The workforce at Thames has kept it going through thick and thin. The onus is on the government and Ofwat to ensure that the lenders invest in the workforce, assets and infrastructure. 

“Employees at Thames have been through the mill and deserve certainty and security.”

Ofwat is reviewing the proposals.