Thames Water has moved a step closer to nationalisation after government ministers reportedly formally objected to the £10bn rescue deal proposed by its creditors.

According to The Times this morning, environment secretary Emma Reynolds has written to water regulator Ofwat this week to raise concerns about the plan for the struggling, indebted utility giant.

Reynolds is understood to be concerned that the creditors’ offer for Thames Water is “weak”, not least after “15 years of mismanagement and failure”.

Those who support placing Thames into special administration argue that this would give the company a fresh start by forcing existing investors to write off losses and allow the company to be sold without its existing debt pile.