Shareholders in Thames Water have blamed regulator Ofwat after investors pulled a £500 million rescue package from London's water supplier earlier today.
In a statement, the nine shareholders said Ofwat had failed to provide regulatory support for Thames Water's turnaround plan, which included over £18 billion worth of investments, including in infrastructure.
"To support such unprecedented investment, shareholders committed to supporting a further £3.25 billion of investment on top of the £500 million provided last year, and pledged to take no cash out of the business until a turnaround was delivered," the statement read.
"This was a solution which addresses the root cause of Thames Water’s challenges without the need for any taxpayer funding.
"However, after more than a year of negotiations with the regulator, Ofwat has not been prepared to provide the necessary regulatory support for a business plan which ultimately addresses the issues that Thames Water faces. As a result, shareholders are not in a position to provide further funding to Thames Water."
Thursday's news that Thames would not qualify for rescue funding has prompted speculation over the highly-indebted firm's future.
Speaking to the BBC, chief executive Chris Weston did not rule out the possibility of special administration, which would likely be publicly handled.
"If at the end of the day - probably well into the end of next year - we were in a situation where we had no equity, then there would be the prospect […] of special administration, but we are a long way from that point at the moment," he said.
Liberal Democrat MPs have previously called for such administration, with treasury spokesperson Sarah Olney urging action once again on Thursday.
"Drastic action is needed to keep the taps running for millions of customers. It must be clear by now that we can’t trust these asset strippers to put out their own blaze," she said.
Chancellor Jeremey Hunt said the Treasury was monitoring the situation, adding: "Our understanding is that the company is still solvent."