The UK government has approached consultancies about taking the role of special administrator in a sign that ministers are bracing themselves for the imminent renationalisation of Thames Water, the Financial Times reported on Thursday. 

Consultancies including Teneo, Interpath and EY are among the potential candidates to run a so-called special administration regime, according to FT sources.

A SAR is a temporary measure designed to keep services running, and suppliers and staff paid, in the event of a corporate collapse. 

‘We are ready now, we could do one [SAR] today, if we had to,’ said one official. ‘Incidentally, being ready for a SAR is also the strongest lever that we as government can have to make sure that another market-led, private-led solution is found.’

Thames Water is struggling under its £19 billion debt pile, the FT noted, and has warned that it will run out of cash in March unless the High Court signs off a £3 billion loan at a hearing in early February.

Another government official said that there had been ‘informal engagement’ with certain consultancies over a special administrator role but no formal interview process.

Steve Reed, the environment secretary, said in October that he had ‘ruled out nationalisation’.

Officials insist that taking the company into SAR would not technically be a nationalisation despite it being a big state intervention. 

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