Thames Water’s customers will pay the price for the “futile, expensive and extremely short-term bail out” approved by a High Court judge, an MP has warned.
Liberal Democrat Charlie Maynard said he would launch an appeal against Tuesday’s decision.
The water company’s plans for a £3billion loan was given the green light in a bid to prevent it from going bust next month.
But campaigners and MPs warned the judgement is “nothing but a stay of execution” for Thames Water.
Mr Maynard said allowing Thames Water to take on £3bn more debt “is not in the interests of their millions of customers”.
He added: “They will all be paying the price for this futile, expensive, and extremely short-term bail out.
“This restructuring is simply throwing good money after bad. The money from our bills which is being spent on interest repayments is desperately needed to repair water infrastructure, improve customer service, and clean up our rivers.
“I intend to keep fighting for Thames Water’s customers by appealing this judgement. The only way to get Thames out from under this mountain of debt, and back onto a stable financial footing at this point is to put the company into Special Administration with a swift exit plan.”
After weeks of hearings in the High Court, a funding plan for Thames Water has been approved as part of a loan deal agreed internally last year.
The utility company, with a debt around £19billion, supplies about 16 million households across London and the South East.
But it has at least £16 billion of debt, and had previously warned it only had enough money to keep running until March 24.
The new financing is designed to stop it from going bust, albeit temporarily.
Matthew Topham, lead campaigner at We Own It, said: “This judgement is nothing but a stay of execution for Thames Water. The privatised company will limp on for a few more months like a profit-thirsty zombie.
“This crisis loan will keep Thames afloat in the short-term, but their underlying business model is rotten and should be condemned. It relies on piling up debt and raising customer bills so they can pay huge bonuses and dividends – all whilst pumping raw sewage into our waterways. The reason they’re getting bailed out is because they ran out of other people’s money to line their pockets with. It’s only a matter of time before they end up on the edge of bankruptcy again.
“This is the ‘doom loop’ of privatised water, and there is only one way to break the cycle – public ownership.”
Thames Water has been at the centre of a growing scandal in the wider water industry.
Bills will climb steeply over the coming years, while privately-run water firms are still pumping raw sewage into rivers and waterways.
That is despite a succession of penalties from regulators Ofwat and the Environment Agency.
Meanwhile, many bosses, including those at Thames Water, have still been given large bonuses in the last year.
A spokesman for the Environment Department said: “The company remains stable and the Government is closely monitoring the situation.
“It would be inappropriate to comment further on the financial matters of a private company.”
