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Ministers have lined up insolvency practitioners to prepare for the potential collapse of Thames Water, Britain’s biggest water utility.

Sky News can exclusively reveal that Steve Reed, the environment secretary, has signed off the appointment of FTI Consulting to advise on contingency plans for Thames Water to be placed into a Special Administration regime (SAR).

Sources said on Tuesday that the advisory role established FTI Consulting as the frontrunner to act as the company’s administrator if it fails to secure a private sector bailout – although approval of such an appointment would be decided in court.

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Thames Water, its largest group of creditors and Ofwat, the industry regulator, have been locked in talks for months about a deal that would see its lenders injecting about £5bn of new capital and writing off roughly £12bn of value across its capital structure.

The discussions are said to be progressing constructively, although they appear to rely in part on the prospect of the company being granted forbearance on hundreds of millions of pounds of regulatory fines.

Responding to an enquiry from Sky News on Tuesday, a government spokesperson said: “The government will always act in the national interest on these issues.

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“The company remains financially stable, but we have stepped up our preparations and stand ready for all eventualities, including applying for a Special Administration Regime if that were to become necessary.”

Insiders stressed that FTI Consulting’s engagement by the Department for the Environment, Food and Rural Affairs (DEFRA) did not signal that Thames Water was about to collapse into insolvency proceedings.

A SAR would ensure that customers would continue to receive water and sewage services if Thames Water collapsed, while putting taxpayers on the hook for billions of pounds in bailout costs – a scenario the chancellor, Rachel Reeves, is keen to avoid at a time when the public finances are already severely constrained.

The SAR process can only be instigated in the event that a company becomes insolvent, can no longer fulfil its statutory duties or breaches an enforcement order, according to insiders.

Mr Reed has repeatedly stressed the government’s desire to avoid taking Thames Water into temporary public ownership, but that it was ready to deal with “all eventualities”.

“Thames Water must meet its statutory and regulatory obligations to its customers and to the environment–it is only right that the company is subject to the same consequences as any other water company.

The company remains financially stable, but we have stepped up our preparations and stand ready for all eventualities,” he told the House of Commons in June.

Thames Water, which has about 16m customers, serves about a quarter of the UK’s population.

It is drowning under close to £20bn of debt, and was previously owned by Macquarie, the Australian infrastructure and banking behemoth.

Its most recent consortium of shareholders, which included the Universities Superannuation Scheme and an Abu Dhabi sovereign wealth fund, have written off the value of their investments in the company.

The government’s SAR process has only been tested once before, when the energy retailer Bulb failed in 2021.

Bulb was ultimately sold to Octopus Energy with the taxpayer funding used to save and run the company since having been repaid.

Thames Water is racing to secure a rescue plan involving funds such as Elliott Management and Silver Point Capital, with a deadline of late October to appeal to the Competition and Markets Authority against Ofwat’s final determination on its next five-year spending plan.

Ofwat has ruled that Thames Water can spend £20.5bn during the period from 2026, with the company arguing that it requires a further sum of approximately £4bn.

Mike McTighe, a veteran corporate troubleshooter who chairs BT Group’s Openreach division, has been parachuted in to work with the funds.

The company said in its accounts last month that there was “material uncertainty” over whether it could be solvently recapitalised.

Earlier this year, Thames Water was fined a record £123m over sewage leaks and the payment of dividends, with Ofwat lambasting the company over its performance and governance.

In recent weeks, Thames Water has been engulfed in a row over the legitimacy of bonuses paid to chief executive Chris Weston and other bosses, even as it attempts to secure its survival.

Under new laws, Thames Water is among half a dozen water companies which have been barred from paying bonuses this year because of their poor environmental records.

The creditor group was effectively left as the sole bidder for Thames Water after the private equity firm KKR withdrew from the process, citing political and reputational risks.

The Hong Kong-based investor CK Infrastructure Holdings (CKI), which already owns Northumbrian Water, has sought to re-engage in talks about a rescue deal but has gained little traction in doing so.

News of FTI Consulting’s appointment also comes on the same day as a “nationally significant” water shortfall was declared across swathes of the country.

Last week, Sky News revealed that David Black, the Ofwat chief executive, was to step down following the publication of a government-commissioned review which recommended the regulator’s abolition.

He has been replaced by Chris Walters, another Ofwat executive, on an interim basis.

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Reports of BBC coup ‘complete nonsense’, board member tells MPs

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Reports of BBC coup 'complete nonsense', board member tells MPs

Reports of a “board-level orchestrated coup” at the BBC are “complete nonsense”, non-executive director Sir Robbie Gibb has told MPs.

Sir Robbie, whose position on the BBC board has been challenged by critics in recent weeks, was among senior leaders, including the broadcaster’s chair, Samir Shah, to face questions from the Culture, Media and Sport committee about the current crisis.

The hearing took place in the wake of the fallout over the edit of a speech by US President Donald Trump, which prompted the resignation of the corporation’s director-general and the chief executive of BBC News, and the threat of a lawsuit from the US president.

Former BBC editorial adviser Michael Prescott wrote the memo that was leaked. Pic: PA
Image:
Former BBC editorial adviser Michael Prescott wrote the memo that was leaked. Pic: PA

Former editorial adviser Michael Prescott, whose leaked memo sparked the recent chain of events, also answered questions from MPs – telling the hearing he felt he kept seeing “incipient problems” that were not being tackled.

He also said Mr Trump’s reputation had “probably not” been tarnished by the Panorama edit.

During his own questioning, Sir Robbie addressed concerns of potential political bias – he left BBC News in 2017 to become then prime minister Theresa May’s director of communications, a post he held until 2019, and was appointed to the BBC board in 2021 by Boris Johnson.

BBC board member Sir Robbie Gibb appearing before the Culture, Media and Sport committee. Pic: PA
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BBC board member Sir Robbie Gibb appearing before the Culture, Media and Sport committee. Pic: PA

“I know it’s hard to marry the fact that I spent two years as director of communications for the government… and my genuine passion for impartiality,” he said.

“I want to hear the full range of views… I don’t want the BBC to be partisan or favour any particular way.”

Asked about reports and speculation that there has been a “board-level orchestrated coup”, Sir Robbie responded: “It’s up there as one of the most ridiculous charges… People had to find some angle.

“It’s complete nonsense. It’s also deeply offensive to fellow board members… people of great standing in different fields.”

He said his political work has been “weaponised” – and that it was hard as a non-executive member of the BBC to respond to criticism.

‘We should have made the decision earlier’

BBC chair Samir Shah also answered questions. Pic: PA
Image:
BBC chair Samir Shah also answered questions. Pic: PA

Mr Shah admitted the BBC was too slow in responding to the issue of the Panorama edit of Mr Trump, which had been flagged long before the leaked memo.

“Looking back, I think we should have made the decision earlier,” he said. “I think in May, as it happens.

“I think there is an issue about how quickly we respond, the speed of our response. Why do we not do it quickly enough? Why do we take so much time? And this was another illustration of that.”

Following reports of the leaked memo, it took nearly a week for the BBC to issue an apology.

Mr Shah told the committee he did not think Mr Davie needed to resign over the issue and that he “spent a great deal of time” trying to stop him from doing so.

Is director-general role too big for one person?

Tim Davie is stepping down as BBC director-general
Image:
Tim Davie is stepping down as BBC director-general

Asked about his own position, Mr Shah said his job now is to “steady the ship”, and that he is not someone “who walks away from a problem”.

A job advert for the BBC director-general role has since gone live on the corporation’s careers website.

Mr Shah told the hearing his view is that the role is “too big” for one person and that he is “inclined” to restructure roles at the top.

He says he believes there should also be a deputy director-general who is “laser-focused on journalism”, which is “the most important thing and our greatest vulnerability”.

Earlier in the hearing, Mr Prescott gave evidence alongside another former BBC editorial adviser, Caroline Daniel.

He told the CMS committee that there are “issues of denial” at the BBC and said “the management did not accept there was a problem” with the Panorama episode.

Mr Prescott’s memo highlighted concerns about the way clips of Mr Trump’s speech on January 6 2021 were spliced together so it appeared he had told supporters he was going to walk to the US Capitol with them to “fight like hell”.

‘I can’t think of anything I agree with Trump on’

Mr Trump has said he is going to pursue a lawsuit of between $1bn and $5bn against the broadcaster, despite receiving an official public apology.

Asked if the documentary had harmed Mr Trump’s image, Mr Prescott responded: “I should probably restrain myself a little bit, given that there is a potential legal action.

“All I could say is, I can’t think of anything I agree with Donald Trump on.”

He was later pushed on the subject, and asked again if he agreed that the programme tarnished the president’s reputation, to which he then replied: “Probably not.”

Read more:
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Why are people calling for Sir Robbie Gibb to go?

Mr Prescott, a former journalist, also told the committee he did not know how his memo was leaked to the Daily Telegraph.

“At the most fundamental level, I wrote that memo, let me be clear, because I am a strong supporter of the BBC.

“The BBC employs talented professionals across all of its factual and non-factual programmes, and most people in this country, certainly myself included, might go as far as to say that they love the BBC.

He said he “never envisaged” the fallout that would occur. “I was hoping the concerns I had could, and would, be addressed privately in the first instance.”

Asked if he thinks the BBC is institutionally biased, he said: “No, I don’t.”

He said that “tonnes” of the BBC’s work is “world class” – but added that there is “real work that needs to be done” to deal with problems.

Mr Davie, he said, did a “first-rate job” as director-general but had a “blind spot” toward editorial failings.

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Police appeal after man charged with murdering two women and raping third

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Police appeal after man charged with murdering two women and raping third

Police have appealed for information after a man was charged with murdering two women and raping a third.

Simon Levy has been charged with murdering 53-year-old Carmenza Valencia-Trujillo who died on the Aylesbury Estate, south-east London, on 17 March, the Metropolitan Police said.

In September, Levy, of Beaufoy Road, Tottenham, north London, was charged with murdering 39-year-old Sheryl Wilkins who was found unresponsive in High Road, Tottenham, on 24 August.

He is also accused of grievous bodily harm with intent, non-fatal strangulation and two counts of rape against a third woman, who cannot be named for legal reasons, in Haringey, north London, on 21 January, police said.

The 40-year-old will appear at Westminster Magistrates’ Court on Tuesday charged with Ms Valencia-Trujillo’s murder.

Sheryl Wilkins was found unresponsive in High Road, Tottenham, on 24 August. Pic: Metropolitan Police
Image:
Sheryl Wilkins was found unresponsive in High Road, Tottenham, on 24 August. Pic: Metropolitan Police

He is also due to appear at the Old Bailey on Wednesday for a plea and trial preparation hearing for the murder of Ms Wilkins.

Detectives believe there may be individuals who have information relevant to this investigation – or who are yet to report incidents which have directly impacted them – and are asking for people to come forward.

This breaking news story is being updated and more details will be published shortly.

Please refresh the page for the latest version.

You can receive breaking news alerts on a smartphone or tablet via the Sky News app. You can also follow us on WhatsApp and subscribe to our YouTube channel to keep up with the latest news.

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Family of woman killed 56 years ago, in a case of mistaken identity, believe her remains are buried in a garden

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Family of woman killed 56 years ago, in a case of mistaken identity, believe her remains are buried in a garden

The family of murder victim Muriel McKay believe her remains are buried in a garden in east London, the High Court has heard.

Ms McKay was officially declared dead by a High Court judge earlier this month, 56 years after being kidnapped.

The 55-year-old was taken from her London home by Nizamodeen and his brother Arthur Hosein in December 1969.

They mistook her for Anna, the wife of media mogul Rupert Murdoch.

Ms McKay’s husband was newspaper executive Alick McKay, the deputy to newspaper mogul Rupert Murdoch.

The kidnappers realised their mistake, but still demanded a £1m ransom for her safe return.

Read more:
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The two Hosein brothers were convicted and jailed for life in one of the first murder trials without a body. Arthur Hosein died in prison.

On Monday, barristers for two of Ms McKay’s children, Ian McKay and Dianne Levinson, asked a judge to order that the homeowners of two neighbouring properties on Bethnal Green Road allow the family to conduct a “ground-penetrating radar survey” of a shared back garden.

One of the homeowners, Madeleine Higson, opposes the injunction bid, which would also stop her from disturbing the garden.

Mr Justice Richard Smith said he will hand down his judgment at 2pm on Tuesday, stating the case involved “not uncomplicated legal sensitivities”.

Speaking following the hearing, Ms McKay’s grandson Mark Dyer said the bid to discover her remains was “important to the whole family”.

He said: “We do not want to be felt sorry for, we just actually want to get on and … scan the place, check for my grandmother.

“We’ve been told she’s there, most probably there, so we need to pick her up.

“She would like to come home for Christmas this year and what is left of her is purely some remains, some bones.

“They should find a place where the family can go and visit, where whoever’s interested in what happened to her should go and visit, and that’s the right thing to do.”

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