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.

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.

The City watchdog has provisionally banned former star fund manager Neil Woodford and fined him and his former fund company almost £46m.

The Financial Conduct Authority (FCA) said it planned to prevent Mr Woodford from holding senior manager roles and managing funds.

The watchdog also aimed to fine him £5.89m and Woodford Investment Management (WIM) £40m related to its collapse in 2019.

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Mr Woodford’s flagship fund, Woodford Equity Income (WEI), was wound down after investors tried to withdraw cash faster than the fund could pay out, amid concerns over its high exposure to illiquid and unquoted shares.

The FCA determined that Mr Woodford and the fund “made unreasonable and inappropriate investment decisions” between July 2018 and June 2019.

The fund’s sale of liquid assets and acquisition of illiquid ones meant WEI was unable to meet rules in place at the time, whereby investors should have been able to access their funds within four days.

“WIM and Mr Woodford did not react appropriately as the fund’s value declined, its liquidity worsened and more investors withdrew their money,” the FCA said.

“The FCA has concluded that Mr Woodford held a defective and unreasonably narrow understanding of his responsibilities.”

Steve Smart, its joint executive director of enforcement and market oversight, added: “Being a leader in financial services comes with responsibilities as well as profile. Mr Woodford simply doesn’t accept he had any role in managing the liquidity of the fund.

“The very minimum investors should expect is those managing their money make sensible decisions and take their senior role seriously.

“Neither Neil Woodford nor Woodford Investment Management did so, putting at risk the money people had entrusted them with.”

Both Mr Woodford and WIM have referred the case to the Upper Tribunal for appeal.

He was yet to comment.

Mr Woodford was once considered the star stock picker of his generation.

He launched his own investment business after building up a reputation for delivering stellar returns while at Invesco Perpetual.

At its height in 2017, the Woodford Equity Income Fund had a value of over £10bn, but by the time of its suspension in June 2019, this had sunk to as low as £3.7bn.

While a redress scheme enabled investors to get some cash back, around 300,000 people lost money through the fund’s collapse.