Thames Water has been labelled “junk” by credit agencies who are losing faith in the water company’s ability to ever pay back the billions it owes.

The water company supplying Swindon owes £15 billion and only has enough cash to continue operating until May 2025.

Two credit agencies - independent companies that securely collect and hold data on companies’ or individuals’ financial history - say that Thames Water’s financial situation is worse than previously thought.

Moody’s downgraded Thames Water to a Caa1 rating and S&P lowered its rating to CCC+. These are known as “junk” ratings and mean it is a very high-risk company likely to default on its debts.

Both agencies believe that much of Thames Water’s day-to-day funding will run out in December if it does not get more from its creditors.

But this will be harder with a lower credit rating, as potential lenders will have less confidence they will ever be paid back.

S&P wrote that it is likely the water firm “will default in the next 12 months without any material positive developments”.

It comes at a bad time as Thames Water said it was about to begin the process of raising more money from investors over the next few weeks.

If Thames Water does not raise fresh cash, it faces a potential nationalisation next year, something the Labour Government has said it is keen to avoid.

Thames Water is one of many water companies facing intense scrutiny over alleged years of underinvestment in infrastructure leading to increased sewage spills and burst pipes.

In Swindon, Thames Water pipe bursts are not a rare occurrence with the latest flooding the multi-million-pound Fleming Way development - although this was due to a failed attempt to connect a new pipe rather than failing old infrastructure.

Swindon Borough Council “insisted” on Thames Water coming to a committee meeting in June following a three-day closure on a major route - Mead Way - due to a burst water main.

At the meeting, head of regional networks David Haydon admitted the number of burst pipes “isn’t normal”.

Prior to the meeting councillor Dale Heenan said: “Every month we seem to see a burst mains water pipe flooding a road in Swindon, and national news about the Thames Water finances with the threat of bankruptcy.

“We need to know just what is the truth about the situation, without the party political spin.”