Ministers have seemed to allay fears across the affect of Thames Water probably going underneath because the regulator vowed to work with the sector to cope with its debt ranges.

Work and Pensions Secretary Mel Stride mentioned there have been “contingency plans in place for any eventuality” as Thames Water battles to finance the £14 billion of debt on its books following rate of interest rises. It comes as a number of experiences prompt issues about Thames Water’s funds had now broadened to different corporations within the business.

The Times cited a Whitehall supply as saying: “A lot of these companies are highly geared and struggling. There is a worst case scenario where other companies end up in the same place as Thames Water.” A Government supply identified that business regulator Ofwat raised the difficulty in December in its 2021/22 Monitoring Financial Resilience report, with Thames Water, Southern, Yorkshire, SES and Portsmouth talked about.

Thames Water is looking for to lift money from buyers because it struggles underneath a £14 billion debt pile, with the Government mentioned to be laying the groundwork for the agency’s emergency nationalisation.

The utility large is the UK’s greatest water provider, serving individuals throughout London and the South East. In a press release on Wednesday night, Ofwat mentioned it has been “clear that Thames Water has significant issues to address” and that it wanted to “improve their financial resilience”.

But the watchdog mentioned the water sector remained a pretty funding alternative. A spokesman mentioned: “Ofwat will continue to keep companies’ financial resilience under close scrutiny and work with companies to ensure they take action to ensure that they have the financial backing to deliver for customers and the environment.”

Senior Conservative Cabinet minister Mr Stride advised Sky News’ The Take With Sophy Ridge programme that he couldn't touch upon the “financial position of a private company” when requested about Thames Water’s place. But he mentioned that “water will continue to flow” regardless of the consequence.

“The Government has contingency measures for exactly the kind of circumstances that may play out here yet to be seen. And that’s basically where we are with it,” he added.

On Channel 4 News, Mr Stride, a former Treasury minister, mentioned he “disagreed” with a suggestion that water privatisation had not labored within the nation’s monetary curiosity.

“I don’t think it has been an absolute disaster,” he advised the broadcaster. Thames Water, having confirmed it's working with shareholders to safe the money it wants, has mentioned it requires “further equity funding” on prime of the £500 million it raised simply three months in the past.

On Tuesday, Thames Water chief government Sarah Bentley stepped down with speedy impact amid mounting worries over the monetary stability of the corporate. The agency is now reportedly racing to lift £1 billion from buyers to shore up its funds, with AlixPartners mentioned to be advising the agency on turnaround plans.

Thames Water – owned by a consortium of pension funds and sovereign wealth funds – has come underneath stress in recent times over its poor efficiency in tackling leaks and sewage contamination, whereas dealing with criticism for handing out huge rewards to prime bosses and shareholders.

The group’s shareholders embrace Chinese sovereign wealth fund China Investment Corporation, UK personal pension fund the Universities Superannuation Scheme, and Abu Dhabi Investment Authority subsidiary Infinity Investments.