Thames Water will appoint independent monitors and can only remove these once its credit rating improves, regulator Ofwat confirmed Friday.
The regulator said London's water supplier had committed to remedies, such as appointing external monitors after it lost investment-grade credit ratings last month.
Agencies S&P and Moody’s downgraded the UK's largest water supplier to ‘junk’ status in July.
This meant Thames was in breach of licence conditions, according to Ofwat, with the supplier having appeared on the brink of renationalisation recently after racking up a £15.2 billion debt pile.
Ofwat also said on Friday that Thames had committed to “taking the steps required to deliver an equity raise” and “delivering a suitable operational business plan to achieve turnaround”.
Thames previously said it has enough cash to last until May next year, with failure to secure more placing the supplier under threat of government-handled administration.