Debt-ridden Thames Water hits out at Ofwat after regulator rules it can only increase bills by 23%

Debt-ridden Thames Water has criticised the industry regulator as it seeks to raise prices.

Britain’s biggest supplier, buried under £15bn of debt, wants to increase household bills by £18.99 a month (or 52 per cent) by 2030.

Ofwat said last month it could only increase bills by 23 per cent over five years.

But lobby groups warn that a cap would hamper companies’ ability to raise enough investment to stop problems such as sewage spills.

Thames chief executive Chris Weston said Ofwat’s proposed 23 per cent increase would be “neither bankable nor investable”.

“It would also prevent the company from changing and recovering,” he added.

Thames, which serves 15 million homes in London and the south-east, is facing a funding crisis that has left it on the brink of emergency nationalisation as it struggles under the weight of its debt.

It is currently struggling to raise £3.3bn and is on the hunt for more investors.

Last month, Thames Water lost its investment-grade credit rating, putting it in breach of its licence conditions and moving closer to renationalisation.

Its bonds are currently trading at deep discounts to face value and some major lenders have suffered losses as they reduce their exposure.

The industry had set out plans to invest £105bn over the next five years, but Ofwat had proposed cutting this figure by £17bn.