Anger towards the water industry grew further when plans to reduce fines for some wastewater landfills were revealed.
Campaigners were furious at watchdog Ofwat, which is understood to want to scrap fines for struggling businesses.
Environmental groups called the plans “disgusting” as it would mean some utilities would face fewer or no fines. Instead, they would be urged to invest to defend themselves against nationalization.
It means beleaguered Thames Water can be given a “recovery scheme” to help it with its high debts, despite sewage leaks.
The industry has been pushing for such measures, saying the fines are like “shooting the company in the leg.” His argument is that sanctions make it more difficult to invest in solutions.
Sewage leak – a discharge into the River Thames near Thames Water’s long reach sewage treatment plant
Britain’s biggest supplier is on the brink of collapse after shareholders claimed it had become “uninvestable” after racking up more than £14bn of debt.
And there are fears that the crisis could lead to the nationalization of Thames. But Ofwat’s latest idea has left many furious as companies continue to pump wastewater into precious lakes.
Debt-driven providers including Southern Water, South East Water and Yorkshire Water could be eligible for the recovery plan.
But environmental activists believe the regulator is not tough enough. Doug Parr, of Greenpeace UK, said: “If history is correct, the regulator has decided to reward failure and punish companies for devaluing water supplies, giving them softer targets, a holiday on enforcing regulations and more dividends for shareholders.
“Thames Water has exactly what I wanted.”
Thames was privatized in 1989 with no debt. It has taken on more debt to help finance its infrastructure projects while paying large dividends, particularly to Australian bank Macquarie.
Matt Staniek, founder of the Save Windermere group, which wants to protect the Lake District from sewage, called the suggestion “absolutely disgusting.”
He added: “The industry continues to prioritize dividend yields over environmental protection and regulators are failing to stop it.”
Shares in listed water companies – United Utilities, Severn Trent and Pennon, which owns South West Water – rose in early trading. But then they retreated: United Utilities closed up 0.9 percent, Severn Trent fell 0.1 percent and Pennon rose 0.5 percent.
United has been accused of pumping millions of liters of sewage into Lake Windermere and handing out almost £340m to shareholders.
Severn Trent was fined more than £2 million for allowing ten Olympic-sized pools of sewage to flow into the River Trent.