Prime Minister Andy Burnham has urged officials to abandon their current plans for Thames Water and instead propose more radical solutions for the troubled company. This directive is seen as an early test of his commitment to bring "the essentials of life" under public control.
Advisers have been told to explore options not previously considered feasible, even if these involve taxpayer money or legal challenges. One proposal being examined is to convert around £100m in outstanding fines owed by Thames Water into a government stake in the company. This would reportedly save creditors money while giving ministers a say in its operation.
Burnham had previously expressed a desire to nationalise Thames Water, which is facing financial difficulties and recently sought an additional £2.4bn from its creditors. However, finding a way to do so without incurring billions in costs or lengthy court battles has proven challenging.
Meanwhile, Environment Secretary Angela Eagle is developing a water bill that aims to remove a Thatcher-era cap on government ownership of water companies and could revise the bankruptcy framework for the industry. Government advisers believe modifications to the "special administration regime" (SAR) would facilitate future state control of companies like Thames Water.