Thames Water investors pull plug on £500m of funding amid standoff with regulator

Decision increases concerns about financial future of UK's biggest water firm and increases prospect of nationalisation

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Investors in Thames Water have pulled the plug on 500m of emergency funding amid a standoff with the industry regulator over attempts to raise bills, increasing the prospect that the heavily indebted company may be nationalised.

The beleaguered utilities company said on Thursday that its shareholders had refused to provide the first tranche of 750m funding to secure its short-term cashflow, after the company had failed to meet certain conditions.