Thames Water could be sold to the Chinese

Thames Water could be sold to a Chinese infrastructure company after the government places it in temporary public ownership to 'wipe' out much of its £16.8billion debt.

Steve Reed, the environment secretary is understood to be making 'active preparations' to essentially nationalise Britain's largest water utility by putting it into a special administration scheme (SAR) while the government looks for a new buyer.

One of the leading contenders is CK Infrastructure Holdings (CKI), a Hong Kong based company, which could take over Thames Water within weeks of it going into special administration, The Times reported.

CKI already owns Northumbrian Water and UK Power Networks and has said it would be ready to introduce tougher fines for environmental infringements, which Thames Water's creditors say is financially unviable.

Yesterday, Mr Reed approved the appointment of FTI Consulting to advise on contingency plans for Thames Water to be placed into special administration.