Turn failing water firms into not-for-profit cooperatives, MPs and mayors tell PM

Labour politicians say mutualised model puts public in control without adding debt to government's balance sheet

MPs and mayors close to Andy Burnham have told the prime minister there is a third way" to gain more control of failing companies, as the row over whether or not to nationalise Thames Water rumbles on.

Burnham is said to be concerned about the increase in government debt that Treasury projections show could be a result of nationalising water companies.