Thames Water creditors pick ex-minister John Hutton as chair designate

Oct 20 (Reuters) - Thames Water's senior creditor group on Tuesday named former British cabinet member John Hutton as independent chair-designate to lead a planned turnaround of the struggling water utility to avert government control.

The creditors, known as London & Valley Water consortium, hold about £17 billion ($23 billion) of Thames Water's roughly £20 billion in debt and are pursuing a 10-year rescue plan involving debt writedowns and fresh equity investment.

A member of the ruling Labour Party, Hutton brings vast experience with public-private infrastructure and held cabinet roles in the 2000s under prime ministers Tony Blair and Gordon Brown, including as defence minister.

Hutton also led a public service pensions review in 2011 and has chaired industry groups including Energy UK.

The pressure on Thames Water has grown since Prime Minister Andy Burnham last month pledged legislation allowing public ownership of water companies.

Thames Water is seeking to overhaul its debt-laden balance sheet through a broader recapitalisation as it works to improve its finances and services amid mounting fines and public anger over the amount of sewage polluting rivers.

Last week it reached an agreement with its junior creditors, securing support from holders of more than 60% of its junior Class B debt.

London & Valley Water also named Mike McTighe as Thames Water's vice-chair designate if its plan goes through. McTighe, chair of BT's Openreach, was named as a possible board member in August.

($1 = 0.7492 pounds)

(Reporting by Prerna Bedi in Bengaluru; Editing by Sherry Jacob-Phillips)