THE SNP have accused Andy Burnham of making "yet another broken promise" following reports he has shelved plans to bring struggling Thames Water into public ownership.
The Prime Minister had been considering placing Britain's largest water supplier into a Special Administration Regime (SAR), a form of temporary public ownership which could see the Government take control while a long-term solution is found.
However, ministers have stepped back from taking immediate action after officials raised concerns about the financial implications and potential legal challenges, according to The Times.
The utility company, which supplies around 16 million customers across London and the Thames Valley, is currently saddled with around £20bn of debt after decades of private ownership.
Thames Water has previously estimated that the UK Government would need to inject around £2bn to keep the company operating during an 18-month period of special administration.
The UK Government is instead examining whether there is a viable route to placing the company into administration, a process which is expected to take several months.
A Whitehall source told The Times: "There is no quick or clean solution without an enormous price tag attached.
"It is very challenging and there are significant legal risks. It's not off the table, but further work is being done on potential solutions before a decision can be taken."
However, the UK Government has pushed back on the reports, saying suggestions that ministers had ruled out nationalisation were "speculative" and did not reflect Government policy.
Speaking to LBC, Housing Secretary Matthew Pennycook said: "We are taking no options off the table when it comes to Thames Water."
Burnham had previously argued there was an "overwhelming case for public ownership" of water during his Labour leadership campaign in June.
In his first speech as prime minister, he also said he wanted to see greater public control of "life's essentials" – and bringing Thames Water into public ownership had been seen as an early opportunity for him to demonstrate his commitment to that pledge.
The SNP have now accused Burnham of failing to follow Scotland's approach, where Scottish Water is publicly owned.
Figures from Scottish Water and Water UK put the average annual water bill in Scotland at £532, compared with £639 in England and Wales – a difference of £107.
Seamus Logan MP, SNP Environment, Food and Rural Affairs spokesperson, said: "Andy Burnham has only been in office for a month and he is already breaking his promises and failing to live up to his own hype.
"It's yet another damaging disappointment from a broken Westminster system that is incapable of delivering real change.
"During his leadership campaign, Andy Burnham said the case for public ownership of water was 'overwhelming' but he has broken his promises and failed to follow the SNP government's lead to ensure water is in public hands, like it is in Scotland.
"As a result of SNP action, families in Scotland are saving £107 on their water bills compared to Labour-run England. Families will be left paying the price for Andy Burnham's U-turns and broken promises as bills continue to rise and the cost of living soars out of control."
He added: "This U-turn comes on the eve of yet another broken promise, with energy bills expected to rise for the seventh time under the Labour government to more than £600 higher than promised.
"This isn't the 'change' that Andy Burnham promised. The cost of living is getting even worse under his Labour government, not better.
Thames Water has struggled financially following years of underinvestment in its ageing infrastructure since it was privatised in 1989.
The development comes as a consortium of the company's senior creditors pushes ahead with an alternative rescue package designed to keep it out of public ownership.
London & Valley Water (L&VW), whose creditors include major investors Apollo and Elliott, proposed a revised rescue plan in July involving a decade-long transformation programme.
The proposal also included the possibility of giving the Government a "golden share" in the company.
On Monday, the consortium revealed the first proposed members of a new-look Thames Water board should its rescue package be approved.
Former Yorkshire Water chief executive Nicola Shaw and former BT Openreach boss Clive Selley have been proposed as non-executive directors.
The UK Government has been approached for comment.
