Government 'prepared for range of scenarios' amid Thames Water fears

The government has said it is prepared for a "range of scenarios" following reports that Thames Water could be on the brink of collapse.

Ministers declined to comment on the company's situation, but said regulator Ofwat monitored "the financial position" of all water firms.

Thames Water has been under pressure over its performance and is reportedly struggling under a £14bn debt pile.

The business is yet to comment on the speculation over its future.

According to Sky News and the Financial Times, the UK's biggest water firm is in talks with ministers and Ofwat about contingency plans for the business.

One option would be placing Thames Water in a special administration regime (SAR), which would see it temporarily taken over by the government.

This route was most recently taken with energy supplier Bulb after it ran into financial difficulties.

When asked about the reports, a spokesperson for the Department for Environment, Food and Rural Affairs (Defra) said it was "a matter for the company and its shareholders".

They added: "We prepare for a range of scenarios across our regulated industries - including water - as any responsible government would.

"The sector as a whole is financially resilient. Ofwat continues to monitor the financial position of all the key water and wastewater companies."

On Tuesday, Thames Water's chief executive Sarah Bentley quit the business after just two years in the job. It came weeks after she was asked to forgo her bonus over sewage spills at the company.

The firm has not given a reason for her departure, but it comes amid questions over the company's financial stability.