Thames Water investors reported to be planning legal action over possible nationalisation
The option of nationalising is believed to be being considered by Andy Burnham as he prepares to become Prime Minister on Monday
It's understood a group of Thames Water investors are plotting a legal fight if Andy Burnham's government tries to nationalise the firm.
London & Valley Water is in negotiations to take control of the troubled supplier.
The incoming Prime Minister's spoken of his desire to see 'public control' of Britain's utility companies.
Sky News is reporting that members of the London & Valley Water (L&VW) consortium has engaged Pallas Partners - which describes itself as an "elite litigation and disputes firm" - to draw up plans for a legal fight with the government if its offer for the company is rejected.
Pallas Partners has been drafted in to work alongside Akin Gump, the law firm which is advising the consortium on the terms of their restructuring proposals, according to people close to the situation.
Last month Andy Burnham spoke about his desire to see "public control" of water companies.
Sources believe those comments have prompted the L&VW consortium to accelerate their own contingency plans for legal action against the UK government.
There's been no response yet from Thames Water or London & Valley Water.