Thames Water's investors are poised to resign from the board of its labyrinth of parent companies following the collapse of a planned equity injection.
An equity funding round for the beleaguered water utility was shelved after Ofcom refused to allow the swingeing price increases that the shareholders demanded in return for their participation.
Thames is trying to raise equity money to restructure its balance sheet, which has an estimated £18 billion of debt, chunks of which have seen defaults already.
Thames Water is owned by a consortium of sovereign wealth funds and pension funds that have interests in Kemble, a holding company with numerous subsidiaries that sit above and separate from the core water provider.
Several investors have seats on the boards of these companies through their equity stakes.
Thames Water has until next month to come up with a viable financial plan to get itself out of its debt hole or else face the prospect of going into special administration, effectively nationalisation by the government.
Other water groups have warned that if that happens, the whole sector might become "uninvestable" at a time when it is under huge pressure to upgrade decades-old infrastructure to stop widespread sewage dumping.
Ofwat, the industry regulator, will publish its draft determination on all the utilities' five-year business plans next month with final versions to be agreed by December.