THAMES WATER’S £3 billion bailout was approved by the High Court today, triggering outrage as campaigners warned of higher bills from sky-high interest payments.

The High Court cleared the loan just weeks before the debt-laden firm was due to run out of money, temporarily staving off the possibility of special administration and temporary nationalisation.

Former Tory PM Margaret Thatcher wrote off the debts of Britain’s water firms when the industry was privatised in 1989.

But Thames Water, which serves 16 million customers, has since siphoned off £7.2bn in dividends, while amassing £19bn worth of debt. 

In his judgment, Justice Leech noted that the headline interest rate on the emergency loan, which stands at 9.75 per cent was “very, very high.”

The Financial Times reported that the bailout could incur as much as £800 million in interest and fees. 

The first tranche of the loan, some £1.5bn, is expected to keep the firm running until September. 

Following the ruling, Thames Water chief executive Chris Weston said: “This is good news for our customers, puts our business on a firmer financial footing, and enables us to continue to invest in our network and deliver critical infrastructure upgrades for our customers and the environment.”

But anti-privatisation group We Own It has suggested that it could add an extra £250 a year to the average bill.

Matthew Topham, the group’s lead campaigner, described the judgment as a “stay of execution.”

He said: “The privatised company will limp on for a few more months like a profit-thirsty zombie. 

“The reason they’re getting bailed out is because they ran out of other people’s money to line their pockets with. 

“It’s only a matter of time before they end up on the edge of bankruptcy again. 

“This is the ‘doom loop’ of privatised water, and there is only one way to break the cycle — public ownership.”

He noted that if the government put Thames Water into special administration, it would be possible to negotiate a reduction in corporate debt.

“Once the debt has been slashed, the only long-term solution is full public ownership,” Mr Topham added. 

Water worker and GMB activist Cliff Roney said Thames Water was being “rewarded for years of mismanagement and passing costs on to consumers with the right to rack up more debt, more interest, and more fees.

“The government must urgently bring Thames Water into public ownership while protecting staff terms, conditions, and pensions.”

Thames Water saw a 40 per cent increase in pollution incidents last year — partly due to its crumbling infrastructure, some of which dates back to the Victorian era, and the climate crisis.

While saddling itself with more debt, the firm is simultaneously appealing to increase bills, which the firm’s chair Sir Adrian Montague claims will allow Thames Water to build “safe and resilient” water supplies.

Regulator Ofwat capped bill rises at 35 per cent over five years, but Thames Water has appealed to the Competition and Markets Authority to push for a 53 per cent increase.

River Action chair and founder Charles Watson said: “The government must not only take back control of Thames Water but also pass the strongest possible Water Bill to ensure polluters pay and our rivers are properly safeguarded.

“The government must recognise that clean rivers and healthy communities aren’t a barrier to economic growth — they enable it.”

He warned that customers will now have to “bear the brunt of massive interest payments through higher water bills, paying for corporate failure while our rivers remain choked with sewage.”

A spokesperson from the Department for Environment Food and Rural Affairs said: “The company remains stable and the government is closely monitoring the situation. 

“It would be inappropriate to comment further on the financial matters of a private company.” 

A smaller group of creditors proposed an alternative plan which they said would provide the same funding with better terms. 

The High Court ruled that they, along with  Liberal Democrat MP Charlie Maynard who brought a public interest claim into court, can appeal against the ruling.