Contingency plans are being drawn up by the government as Thames Water which is the UK’s largest water supplier could collapse.
Ofwat are holding talks between the treasury and Department for Environment, Food and Rural Affairs (Defra)to place Thames Water into temporary public ownership.
Thames Water which supplies 15 million people are looking to urgently raise £1 billion from investors.
A Government spokesman said, “This is a matter for the company and its shareholders.
“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.”
Work and Pensions Secretary Mel Stride insisted that whatever happens the “water will continue to flow.”
Speaking to LBC Stride said, “Ofwat has as part of its remit a requirement to look at the resilience of the entire sector and will have been looking at and continue to look very closely at Thames Water.”
He added, the government “has contingency arrangements in place to cover any scenario which may play out and what I’m supremely confident of is, whatever the situation is at Thames Water, the water will continue to flow.”