Thames Water took a further step towards nationalisation after shareholders said they would not provide it with a £500m lifeline.

The troubled utility company was told it had not satisfied the conditions to receive the first tranche of support outlined as part of its three-year turnaround plan.

It had been expecting the half a billion pound payment by March 31.

Directors of the troubled supplier had been racing to finalise a £750m lifeline from investors at a board meeting on Wednesday, with the threat of special administration looming as Thames reels from vast debts and poor performance.

Without the extra money from investors, who include Canadian pension fund Omers and the Universities Superannuation Scheme, Thames would be at risk of relying on a taxpayer-backed bailout. The business needs billions of pounds to survive.

Thames announced last year that investors were willing to inject £3.25bn into the business, with £750m expected in 2024.

Chief executive Chris Weston said: ‘I’d like to reassure our customers that, despite this announcement, it is business as usual for Thames Water.  

“Our 8,000 staff remain committed to working with our partners in the supply chain to provide our services for the benefit of our customers, communities and the environment.”

Read the latest updates below.