Andy Burnham pleads for 'more radical' options for crisis-stricken Thames Water after reality hits for PM's nationalisation vow

Andy Burnham has pleaded for Whitehall officials to find more radical options for dealing with crisis-stricken Thames Water, it has been revealed.

The Prime Minister is reported to have urged his advisers to go back to the drawing board and create new plans for fixing the debt-laden firm.

At his Labour conference speech last month, Mr Burnham vowed to strengthen state control of the water system by overturning a ban on public ownership of water firms.

He has previously said Thames Water - which has been left on the brink of collapse as it sinks under a more than £20billion debt mountain - should be nationalised.

But, according to The Guardian, the PM is struggling to find a way to do so without spending billions of pounds or getting tied up in a lengthy court battle.

A source told the newspaper that Mr Burnham has ordered his officials to 'look at all the options and not feel constrained'.

'There are more options than people have assumed to date including ones that have never been properly considered,' another said.

One option reportedly being considered is to convert £100million of outstanding fines into a Government stake in Thames Water to give ministers some say in how it is run.

Under the proposal, the Government could continue to increase its share in the firm if further fines are levied.

But this would fall short of Mr Burnham's stated wish for Thames Water to be nationalised outright.

The PM is now said to have told officials to look at options once considered unfeasible, even if it lands taxpayers with a bill or sees the Government challenged in court.

It has been noted how Mr Burnham's apparent appetite to take more legal risk marks a departure from his predecessor Keir Starmer's stance.

The Government has so far remained tight-lipped on any plans for a so-called special administration regime for Thames Water in a bid to stave off financial collapse.

This is despite the company warning it only has enough money until the year end.

Under the Water Act 1989, there are limits on state ownership of shares in major water and sewerage companies, which vary between 1 per cent and 3 per cent, depending on the firm.

In his Labour conference speech last month, Mr Burnham declared his intent to use new legislation to repeal Margaret Thatcher's 'ideological ban' on public ownership of water companies.

A spokesperson for the Department for Environment, Food and Rural Affairs said: 'Thames Water has been failing the public for a long time, and the Prime Minister and Environment Secretary have been clear that nothing is off the table when it comes to a solution that delivers for customers and the environment.

'We will deliver a strengthened Water Bill to increase public control, deliver cleaner waters, fairer bills and stronger accountability, including removing the historic cap on government ownership of water company shares.'