Thames Water running out of time to secure rescue as debt swells

Thames Water is running out of time to secure a rescue deal as its debt swelled to nearly £20bn.

The UK's largest water and waste company posted a rise in profit after increasing customer bills, and said talks with the government and regulators are ongoing.

The company has sufficient cash to last until early next year.

If a plan is not agreed by then, Thames Water is likely to collapse into government-supervised administration.

Administrators have already been selected to step in if required.

A consortium of its main creditors, named London & Valley Water, has submitted plans to pump investment into the utility and write off debts in return for more lenient performance targets.

The proposed plan would see the lenders write off a quarter of the money they are owed, with a smaller group of junior lenders loans written off completely.

The BBC understands the lender group is hopeful their plan will get agreement in principle before the end of the year but has many critics over the proposed leniency on fines for pollution and spillage.

The lender group insists that allowing Thames to fall into administration will leave it in limbo, where its many problems will deteriorate.

Regardless of what happens to Thames or who owns the company, its water services will continue as normal.

Customer complaints have nearly doubled since last year, the majority of which concern bill hikes.

Chris Weston, Thames Water's chief executive, said in the company's half-year results that "bill increases have been significant this year, and I recognise the difficulties this creates for many".

"A market-led solution clearly remains the best option for our customers, the environment, taxpayers and the economy," he said.