Thames Water creditors secure former Labour minister to drive rescue deal

The group of Thames Water creditors pursuing a £10bn rescue deal for Britain’s largest water supplier has lined up a former senior Labour minister to chair the company, as it tries to win over the government.

The creditor consortium, called London & Valley Water, said on Tuesday that Lord John Hutton had been selected as independent chair designate of the Thames Water board, if the consortium’s takeover of the utility goes ahead.

Creditors have been locked in talks with ministers and regulators for months over the future ownership of the debt-laden water company, which has 16 million customers in the south of England.

Andy Burnham has told officials to rip up their plans for how to fix Thames and present him with more radical options for the stricken company, the Guardian reported this week. Before he became prime minister, he said he would nationalise Thames.

The company has been battling to stave off bankruptcy for years and is running out of cash. It recently asked its creditors for an additional £2.4bn.

The creditor group said Hutton would be supported by Mike McTighe, a telecoms and turnaround specialist, who is leading Thames’s overhaul. McTighe had been lined up as the new chair in August to replace the incumbent Sir Adrian Montague, if the creditors’ takeover is approved by the government. McTighe has now been appointed vice-chair designate and is expected to work closely with the management team.