Lenders to Thames Water are to provide £5bn in funding to the struggling utility, in a emergency turnaround plan.

The group of existing senior creditors to Thames Water, a band of more than 100 financial institutions, said their plan would inject £3bn of equity and another £2.25bn of debt.

Creditors admitted their plan hinges on a considerable leniency from Ofwat over future fines for environmental failings.

The creditors have requested that Ofwat set Thames Water lower environmental standards – and even for it to let the water company off without fines for past breaches of its licences and permits.

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