Thames Water has sought approval for emergency cash in court as it is faces running out of money in four weeks time, the BBC reports.

Lenders of the UK's biggest water and waste company are offering up to £3bn in additional short-term loans to buy time to complete a restructuring of Thames Water.

According to the BBC, failure to secure approval will see the company edge closer to a temporary nationalisation, which could cost the government some £2bn a year.

However, Thames Water is considering whether to appeal against a decision by the water industry regulator Ofwat to increase bills by 35% above inflation over the next five years – short of the 53% increase it applied for.

The BBC write: "Thames Water has been struggling for some time and has been heavily criticised over its performance following a series of sewage discharges and leaks.

"The dire state of the company's finances emerged about 18 months ago when it began a search for funding to avoid collapse."

Thames Water's current financial situation is attributed to its "poor historical regulation, greedy shareholders, climate change and management failure".

As it stands, the water company is in £17bn of debt - the largest of any water company in England and Wales.

For the short term, lenders have offered Thames a further loan of up to £3bn in two instalments.

The first payment is to get it through to the autumn, and a second is to be used if the company decides to appeal against Ofwat's 35% bill rise to the Competition and Markets Authority (CMA) - a process that could take up to a year.

Thames Water has until 18 February to launch an appeal to the CMA.