Measures to try and improve Thames Water's environmental performance have been launched by regulator Ofwat, which appointed an independent monitor after the company breached its operating licence.
The company, which like most of the UK's privately owned water companies has been loaded up with debt, was hit with large fines earlier in the week after it was found to have routinely released sewage into rivers and seas, not just in exceptional circumstances allowed during strong rains.
Regulator Ofwat said Thames, the country's largest water supplier, had breached the terms of its licence after two credit ratings agencies decided that its debts were no longer investment-grade.
Ofwat said the company would now agree to comply with a series of commitments, which as well as the appointment of an independent monitor, will also include appointing new non-executive directors to its board, developing and delivering a suitable plan to turn around its operations, and taking the steps required to deliver an equity raise.
The monitor will report back to Ofwat frequently and be entitled to access to company information, the watchdog said.
Ofwat said the measures will remain in place until the company regains two investment-grade credit ratings.
"We are clear that Thames Water needs to remedy its licence breach, turnaround its operational performance and secure backing from investors to restore its loss of investment grade credit rating," said Ofwat chief executive David Black.
"We will continue to monitor progress very closely and will not hesitate to take any further action if necessary."
If the company does not raise new investment, it could be renationalised.