Rival creditor groups who own Thames Water debt are attempting to reach an agreement on a recapitalisation plan which would offer the water company a £1.5 billion lifeline, according to Sky News.

The UK’s largest water company agreed to the proposal in October - however it requires the approval of 75% of all debt classes for the deal to pass.

The participation deadline is less than a week away – the deal would see a new £1.5 billion debt facility put in place, plus a possible further £1.5 billion.

According to Sky News KKR, one of the world's largest investment firms which already owns a 25% in Northumbrian Water Group is currently in talks with the beleagured water company and its advisers about participating in a £3 billion share sale.

Sky News quotes the following statement from the class A group of creditors:

"Our creditor group is working intensively with the company to develop a plan that will ultimately lead to a restructuring that unlocks billions of pounds in new investment capital and helps deliver the improved service that customers and the environment deserve.

"We want to work constructively with all parties to give Thames the best opportunity to attract the new equity it needs and allow for a full recapitalisation and successful turnaround."

Both the holders of Thames Water's class A bonds and its riskier class B debt have submitted proposals to the water company, which has already endorsed the class A group's offer.