Labour MPs and regional mayors have urged the prime minister to convert failing water companies into locally run, not-for-profit cooperatives rather than nationalising them outright. They argue this would give the public greater control over essential water services, curb shareholder extraction and sewage pollution, while avoiding the additional government debt that nationalisation could place on the Treasury’s balance sheet.

The proposal, published by the Good Growth Foundation and backed by figures including Helena Dollimore, Tracy Brabin and Oliver Coppard, suggests testing the model with Thames Water, which is close to financial collapse. Under the plan, poorly performing firms would face tighter monitoring, limits on executive pay and dividend bans; those entering special administration would use a bank-style “bail-in” so creditors and shareholders absorb losses, then emerge as cooperatives rather than being sold on.