The group of lenders to Kemble Water Finance include ING, Allied Irish Banks (AIB) and the Chinese state-owned Bank of China and Industrial and Commercial Bank of China (ICBC), the Financial Times and Sky News reported.

China’s role in UK infrastructure has been under the spotlight since telecoms groups were forced to strip out Huawei equipment from the UK network and Chinese backers of the Sizewell C nuclear power project were eased out amid security fears.

The announcement raised the prospect of Thames, which has 16 million customers, being temporarily nationalised if it slips into a government-handled administration. Rishi Sunak appears reluctant to pursue this route, although a government project team is examining contingency plans for Thames’s collapse.