THAMES WATER creditors are demanding the company be shielded from key environmental regulations as a part of their rescue bid, it was reported today.

The Financial Times said that it had seen documents sent to the government and regulators.

The documents reportedly demanded that changes be made to Thames Water’s licence, to protect the firm from Ofwat fines, and allow them to raise prices at any time before 2030.

Creditors reportedly said that the firm has a “deep-rooted environmental non-compliance gap” that will expose it to more legal action and requested the removal of environmental fines.

This included those already imposed, such as a £104 million penalty over failures to manage sewage treatment works.

The group is seeking to take control of Thames by injecting £5 billion in funds into the struggling firm, which sits on about £20bn of debt.

We Own It director Cat Hobbs said: “The demands from Thames Water’s creditors for protection from fulfilling their duties ought to be unbelievable at this point.

“[Environment Secretary] Steve Reed can decide to clean up rivers or he can decide to carry on with the failed experiment of a privatised Thames Water, but he can’t do both. The creditors have made that clear.

“Instead of giving in to this ransom note, take Thames Water into special administration, and its debt will get slashed by around half and can be refinanced more cheaply in the public sector.

“Stop ripping off households — give us permanent public ownership instead.”

Mr Reed told Parliament today that Thames Water “must meet its statutory and regulatory obligations to their customers and to the environment.”

But he said that the government has “stepped up our preparations and stands ready for all eventualities,” including special administration.

A Thames Water spokesperson said: “We are investing billions of pounds in our network and any recapitalisation of the business will need to ensure that is maintained for the benefit of all our stakeholders.

“Our focus remains on a holistic and fundamental recapitalisation, delivering a market-led solution which includes targeting investment grade credit ratings.”

Surfers Against Sewage’s Henry Swithinbank said: “This story is yet another blinding demonstration that our current water industry model is reliant on polluting for profit and must be radically transformed — tinkering around the edges just won’t cut it.

“Thames Water is the poster-child for this unethical and utterly broken sector, and the government must step up, put the company into special administration, and show that they are truly committed to ending the scandal of pollution for profit.”