The chief executive of Ofwat is to step down within months as Britain’s embattled water regulator prepares to be abolished by ministers.

Sky News has learnt that David Black is preparing to leave Ofwat following discussions with its board, led by chairman Iain Coucher.

The timing of Mr Black’s exit was unclear on Tuesday afternoon, although sources said he was likely to go in the near future.

An official announcement could come within days, according to industry sources.

Insiders say the relationship between Mr Coucher and Mr Black has been under strain for some time.

Water industry executives said that Steve Reed, the environment secretary, repeatedly referred to the regulator’s leadership during a meeting last month.

It was unclear on Tuesday who would replace Mr Black, or whether an interim chief executive would remain in place until Ofwat is formally scrapped.

The complexity of the impending regulatory shake-up means that Ofwat might not be formally abolished until at least 2027.

Mr Black took over as Ofwat’s permanent boss in April 2022, having held the position on an interim basis for the previous 12 months.

He has worked for the water regulator in various roles since 2012.

If confirmed, Mr Black’s departure will come with Britain’s privatised water industry and its regulator mired in crisis.

Water companies are under increasing pressure from Mr Reed, the environment secretary, over their award of executive bonuses even as the number of serious pollution incidents has soared.

The UK’s biggest water utility, Thames Water, meanwhile, is on the brink of being temporarily nationalised through a special administration regime as it tries to secure a private sector bailout led by its creditors.

In a review published last month, the former Bank of England deputy governor Sir Jon Cunliffe recommended that Ofwat be scrapped.

He urged the government to replace it with a new body which would also incorporate the Drinking Water Inspectorate and absorb the water-related functions of the Environment Agency and Natural England.

Speaking on the day that Sir Jon’s recommendations were made public, Mr Reed said: “This Labour government will abolish Ofwat.

“Ofwat will remain in place during the transition to the new regulator, and I will ensure they provide the right leadership to oversee the current price review and investment plan during that time.”

A white paper on reforming the water industry is expected to be published in November with the aim of delivering a reset of the industry’s performance and supervision, according to industry sources.

A handful of water companies have challenged Ofwat’s price determinations, which in aggregate outlined £104bn in spending by the industry during the 2026-30 regulatory period.

Anglian Water, Northumbrian Water and Southern Water are among those whose spending plans are now being assessed by the Competition and Markets Authority.

Responding to the Cunliffe report last month, Ofwat said: “While we have been working hard to address problems in the water sector in recent years, this report sets out important findings for how economic regulation is delivered and we will develop and take this forward with government.

“Today marks an opportunity to reset the sector so it delivers better outcomes for customers and the environment.

“Ofwat will now work with the government and the other regulators to form this new regulatory body in England and to contribute to discussions on the options for Wales set out in the report.

“In advance of the creation of the new body, we will continue to work hard within our powers to protect customers and the environment and to discharge our responsibilities under the current regulatory framework.”

Ofwat has been contacted for comment about Mr Black’s future, while the Department for Environment, Food and Rural Affairs (DEFRA) has also been approached for comment.

BP has signalled an accelerated effort to bring down costs ahead, refusing to rule out further job losses as artificial intelligence (AI) technology helps drive efficiencies.

The company, which revealed in January that it was to axe almost 8,000 workers and contractors globally as part of a cost-cutting plan, said alongside its second quarter results that it was to review its portfolio of businesses and examine its cost base again.

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BP is under pressure to grow profitability and investor value through a shareholder-driven refocus on oil and gas revenues.

Just 24 hours earlier, the company revealed progress through its largest oil and gas discovery, off Brazil’s east coast, this century.

BP said it was exploring the creation of production facilities at the site.

It has made nine other exploration discoveries this year.

BP’s share price has lagged those of rivals for many years – a trend that investors have blamed on the now-abandoned shift to renewable energy that began under former boss Bernard Looney.

His replacement, Murray Auchincloss, has reportedly come under shareholder pressure to slash costs further, with the Financial Times reporting on Monday that activist investor Elliott was leading that charge based on concerns over high contractor numbers.

Mr Auchincloss said on Tuesday that AI was playing a leading role in bolstering efficiency across the business.

In an interview with Sky’s US partner CNBC, he said: “We need to keep driving safely to be the very best in the sector we can be, and that’s why we’re focused on another review to try to drive us towards best in class… inside the sector, and technology plays a huge part in that.

“Just technology is moving so fast, we see tremendous opportunity in that space. So it’s good for all seasons to drive cost discipline and capital discipline into the business. And that’s what we’re focused on.”

When contacted by Sky News, a BP spokesperson suggested the company had no plans for further job losses this year and could not speculate beyond that ahead of the conclusions of the new cost review.

BP reported a second quarter underlying replacement cost profit of $2.4bn, down 14% on the same period last year but well ahead of analyst forecasts of $1.8bn. Much of the reduction was down to lower comparable oil and gas prices.

It moved to reward investors with a 4% dividend increase and maintained the pace of its share buyback programme at $750m for the quarter.

BP said it was making progress in driving shareholder value through both its operational return to oil and gas investment and cost reductions, which stood at $1.7bn over the six months.

Shares, up 3% over the year to date ahead of Tuesday’s open, were trading 2% higher in early dealing.

Derren Nathan, head of equity research at Hargreaves Lansdown, said of the company’s figures: “Production increases, strong results from trading activities, favourable tax rates, and better volumes and margins downstream all played their part.

“It’s also upping the ante when it comes to exploration and development, culminating in this week’s announcement of an oil find at the offshore Brazilian prospect Bumerangue.

“Its drilling rig intersected a staggering 500m of hydrocarbons. Taking into account the acreage of the block, it’s given BP the confidence to declare the largest discovery in 25 years.”

British Land, the FTSE 100 commercial property company, has hired lawyers to scrutinise rescue deals for the high street retailers Poundland and River Island.

Sky News has learnt that Hogan Lovells, the City law firm, has been instructed by British Land to seek further information on restructuring plans that the two chains say are necessary for their survival.

British Land owns 20 Poundland stores, 13 of which would see rents compromised under its restructuring plan, while it is River Island’s landlord at 22 shops – seven of which would be affected.

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Retail industry sources said that British Land had already struck deals to re-let some of the affected Poundland sites.

The company, which has a market capitalisation of ? and is one of Britain’s biggest commercial landlords, is understood to have abstained on the River Island restructuring plan vote.

The appointment of Hogan Lovells does not amount to a decision to formally challenge the restructurings, but that remains an option in both cases, according to industry sources.

Hogan Lovells has been engaged on a string of previous challenges to retailers’ rescue deals on the basis that they unfairly compromised property-owners.

About 20,000 jobs would potentially be put at risk if Poundland and River Island were to collapse altogether.

Both face sanctions hearings in court this month which will determine whether their rescue deals can go ahead.

Even if the proposals are rubber-stamped, about 100 stores in aggregate across the two chains will be permanently closed.

British Land declined to comment.