Thames Water is nearing a rescue agreement worth up to sixteen billion pounds with its creditors, a deal that could secure the future of Britain’s largest water utility and avert the prospect of special administration.

Negotiations between the heavily indebted company and a group of senior lenders have intensified in recent days, with the proposed package expected to include new funding, debt restructuring and revised terms designed to keep the utility operating as a going concern.

The talks come amid mounting financial strain at Thames Water, which serves around sixteen million customers across London and southern England and has struggled under a debt burden accumulated over years of infrastructure investment and regulatory pressure.

The emerging agreement is understood to involve fresh capital injections alongside concessions from lenders, potentially extending maturities and adjusting repayment schedules to ease short-term liquidity stress.

Government officials have been closely monitoring developments, with contingency plans in place should private negotiations fail, but ministers have repeatedly signalled a preference for a market-led solution that protects customers and taxpayers.

Regulators have also been engaged as discussions progress, focusing on maintaining service standards, environmental obligations and long-term investment commitments.

If finalised, the rescue deal would mark a significant step toward stabilising Thames Water’s balance sheet and restoring confidence in its ability to meet operational and financial obligations.

The outcome is expected to shape the wider debate over the financial resilience of UK water companies and the balance between private financing and public oversight in essential infrastructure.