Thames Water increased its bonus payouts to £4.1m for senior managers, despite warning over “material uncertainty” over its future as it scrambles to recapitalise to avoid nationalisation.

The water company also gave a pay rise to its chief executive, Chris Weston, and drew the ire of Emma Reynolds, the environment secretary, for paying him a previously deferred bonus of £99,000 – despite a ban on bonuses because of pollution failures.