Britain’s insolvency laws may not be equipped to handle the behavior of companies controlling Thames Water, according to Environment Secretary Angela Eagle. She confirmed that the government is considering taking the company into public ownership, a move that could mark a significant shift in the control of essential utilities. Eagle stated she is determined to reform the water industry after being urged by Greater Manchester Mayor Andy Burnham to prioritize the issue. The situation may require legal changes to address the actions of U.S. hedge funds that own much of Thames Water, which have kept the company operational while seeking to renegotiate its debts. This dispute is expected to be the first major test of the prime minister’s commitment to bring Britain’s utilities under public control, despite resistance from corporate interests and potential legal hurdles. Eagle warned that putting Thames Water into special administration—a possible first step toward nationalization—could be more complex than some activists believe. She noted that the company is not technically insolvent, and the existing Water Act did not anticipate the current level of corporate influence over the company. A new water bill is currently being drafted, and no options are being ruled out. Burnham has previously committed to nationalizing Thames Water, focusing on both energy and water sectors. Eagle plays a central role in the prime minister’s government, working on reforms in the water industry and addressing issues like illegal dumping of waste. Eagle is participating in weekly meetings of the National Drought Group, which is managing the response to the country's fifth drought in three years. Speaking from Havant Thicket in Hampshire, where the first new reservoir in over 30 years is being built, she said the country has become less resilient under previous governments and that the pace of new infrastructure will be accelerated. She compared the current situation to her time as a minister under Tony Blair and Gordon Brown, noting that getting projects done is now slower and more difficult. Thames Water is currently burdened with a £20 billion debt and has been fined £122.7 million for sewage spills and unlawful shareholder payouts. Its owners, including major U.S. hedge funds like Elliott Management and Apollo Global Management, are seeking a £10 billion deal to renegotiate its debt and avoid nationalization. Eagle’s predecessor, Emma Reynolds, opposed the deal, arguing it would not provide value for taxpayers, but the investors are still seeking regulatory approval. One potential option is to place the company into special administration, which can be triggered if a company is either insolvent or failing in its legal duties to provide water and sewerage services. Some argue there are clear signs the company is failing in this way. Ewan McGaughey, a professor of law at King’s College London, stated that the government does not need to wait for the creditors of Thames Water to admit insolvency while they charge more to billpayers. He noted that the law allows ministers to revoke Thames Water’s license for breaching principal duties, such as ensuring all sewage undergoes secondary treatment before release and maintaining a reliable water supply. Thames Water's creditors have not yet been contacted for comment.