Thames Water’s lenders have offered Andy Burnham’s government a ‘golden share’ in a last-ditch plan to stave off nationalisation.

The Prime Minister has argued that public ownership is the best solution for the troubled supplier, which has 16m customers across London and the South East but is straining under £20billion of debt.

The London & Valley Water consortium of creditors vying to keep control of the firm yesterday said it ‘recognises that the new Government would like to see water companies create greater local public control and involvement to strengthen accountability for protecting investment and delivering improvements’.

It said this could give taxpayers a ‘golden share’. The consortium, including Silver Point Capital and Elliott Management, proposed a supervisory body giving ‘enhanced local representation’ to councils and regional leaders.

This could give London Mayor Sadiq Khan an oversight role at Thames Water, which yesterday slapped a hosepipe ban on 10m customers. 

The creditors said they remain in talks with regulators over a possible deal with ‘material improvements’ to appease government concerns.

The Government holds golden shares in a number of privatised companies of national and strategic importance, such as Royal Mail following its takeover by EP Group last year.

These special rights shares give the Secretary of State the power to veto major asset sales, foreign takeovers or changes to the firm’s constitution.

A spokesman for London & Valley Water said: ‘Thames Water is a company of national importance and we look forward to working with the new Government to secure a long-term solution.

‘We continue to believe that the L&W plan is by far the fastest and most reliable route to solving Thames Water’s complex problems.

‘Under our plan, customers will have strong protections, regulators and government will have enhanced oversight, and there will be greater controls to ensure Thames Water delivers the record investment needed to improve environmental and operational performance.’