Creditors owed £13bn by Thames Water are urging the government to effectively prevent environmental campaigners from pursuing high court claims against the utility. The lenders, which include major institutional investors and US hedge funds, want ministers to direct the Environment Agency (EA) to prioritise “environmental betterment over punitive enforcement”, arguing this would “significantly mitigate” the risk of judicial reviews or private prosecutions.
Documents seen by the Guardian reveal the creditors’ plan includes a specific clause aimed at neutering legal challenges from campaigners. They warn of a “high risk” of groups bringing judicial review proceedings if the EA relaxes compliance obligations, and a “strong possibility” of private prosecutions against the company or its directors. The creditors propose emergency legislation or new laws to block such actions, though they prefer a government direction to the EA.
Former Undertones singer and water campaigner Feargal Sharkey condemned the move, saying it would “undermine one of the fundamental cornerstones of democracy”. Liberal Democrat MP Charlie Maynard, who has challenged Thames Water in court, urged the environment secretary not to “cave in to these demands”. The government is preparing for possible temporary nationalisation after a US private equity firm quit the auction for Thames Water.
The creditors’ turnaround plan also seeks the reversal of £254m in fines and penalties imposed by Ofwat, including £104.5m for sewage failures and £18.2m for illegal dividends. Thames Water’s fate remains uncertain as the environment secretary told parliament the government is stepping up preparations for a special administration regime, which would wipe out a significant portion of the company’s £20bn debt.
