The president of Thames Water may face more problems with his statement to parliament, namely creditors insist on paying large bonuses to senior bosses.

Last week, Sir Adrian Montague said last week to the Environmental, Food and Rural Affairs (EFRA) Option Committee that lenders insisted that company executives should be paid “very substantial” bonuses from the disputed loans to retain key employees.

The proposed bonus has caused anger as the company said its financial situation is "growing" and that it "almost completely ran out of money" last year.

Sources and court documents show that creditors agree to these bonuses, but not necessarily by creditors.

Sources close to Thames said the company's executives pushed for retention incentives and said all decisions must ultimately be compensated by the Thames board committee committee.

The terms form of the loan is simply an agreement to retain payments may be a factor, and that is what the creditor agrees and does not insist on. Sources close to the lender also said getting a loan does not depend on paying bonuses to Thames executives.

It is understood that Montagu will not be among executives who pay for the retention incentives.

Montagu told the EFRA committee last week that senior management is the company's "most valuable resource" and that the lender group has asked to retain payments.

"To be honest, this is the first time I've had this problem. I did some rebuilding at the time and I don't think we're going to get there, but because the lenders insist that we should say," he added that the bonuses associated with the £3 billion loan "will be funded by lenders" rather than clients.

In a decision to approve the loan in February, the judge's lawyer said evidence from Thames's then-financial director Alastair Cochran showed that the retention plan was "a problem for the board and retention committee." Leech said there is no evidence that it must be approved by the lender.

A Thames Water spokesperson said in a statement: “Thames Water is developing a complex turnover and restructuring process so we can provide better results for our customers and the environment and seek long-term solutions to our financial resilience solutions.

“In our liquidity extension discussion, it was agreed that the retention program is for the retention program to provide the best people to achieve the improvement results that our stakeholders correctly expect during the current uncertainty period, which is reflected in our creditors on October 25, 2024, which is reflected in our creditors.”

The company refuses to repeat Montagu's claims or exceeds its statement.

The UK's largest water company is desperately competing to raise funds and convince water conditioners to give up hundreds of millions of pounds of fines, otherwise the risk will be relocated. The company won a court battle that allowed it to accept loans that came with an expensive 9.75% interest rate and fees.

The Guardian revealed last week that the bonus could be the first to be blocked under the government’s Water (Special Measures) bill, which gives regulators the power to prohibit financial rewards for executives who preside over a failed company. The Thames water can be classified as a classification because it presides over record sewage spills, filling the edges of debt and financial collapse.

"The profits of failure are over," Environment Secretary Steve Reed said last week.

Thames tried to argue that bonuses are not performance-related salaries because they are reserved payments, but ministers insist that they are still able to stop them under the new rules and said the proposal was a "rough attempt" to stick to bonuses. Consultations on new bonus rules are underway and ministers hope they can be in place in June.

Alistair Carmichael, chairman of the EFRA committee, said: "This is a serious issue that my committee will look closely. The government has pointed out that it hopes that Ofwat will discuss the bonuses discussed at the hearing of Thames Water last week. We look forward to discussing these and other developments related to the water sector in an exchange of evidence with our Secretary of State on Tuesday.

A creditor spokesperson declined to comment.

The company, serving about a quarter of the country's population, with a negative number of £20 billion, is currently in exclusive discussions with private equity group KKR to potentially purchase the business.