Thames, which supplies around 16 million homes and businesses in London and elsewhere in southern England, has avoided renationalisation thanks to increased income, loans and hopes of fresh investment.

Progress on the rescue deal without a state bailout -- which requires agreement from regulators and Britain's Labour government -- is "taking longer than expected", Thames added Wednesday.

"Financial performance has improved with strong revenue growth, driven by the regulated price rise," chief executive Chris Weston said in the earnings statement.

Britain's water regulator Ofwat has allowed suppliers to hike bills by about 35 percent by 2030, giving Thames a vital lifeline as it seeks funds to update its ageing infrastructure.

Weston on Wednesday said the higher customer bills had "led to a rise in customer complaints".

Net profit reached nearly pound328 million ($435 million) in the six months to the end of September, compared with a loss of a pound190 million one year earlier.

Net debt stood at pound17.5 billion at the end of September.

Concerns over a possible state bailout were reignited earlier this year when US private equity firm KKR unexpectedly withdrew plans to invest billions of pounds in Thames.

Since then, a rescue plan proposed by its main creditors has been under discussion, while Ofwat in June fined Thames a record pound123 million over pollution and improper dividend payments.

Thames and other British water companies, privatised since 1989, have repeatedly come under fire for allowing the discharge of large quantities of sewage into rivers and the sea.

This has been blamed on under-investment in a sewage system that dates back largely to the Victorian era.