British regulators on Thursday slashed proposed rate increases by water companies, crimping revenue at a time they are struggling to persuade investors to finance efforts to reduce sewage spills that have fouled waterways around the country.

Under the draft decision by regulator Ofwat, Thames Water, Britain’s biggest water company, would be allowed to raise consumer bills by 23% over the next five years, about half of the 44% the company sought.

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The decision comes four months after shareholders of Thames Water, which serves 16 million people in and around London, pulled the plug on 500 million pounds ($643 million) of emergency funding, saying regulators had made the company “uninvestable.” That has triggered speculation the government may nationalize the company to keep water flowing in the capital.

The prospect of big rate increases has sparked outrage in Britain, where consumers are angry about the companies’ failure to prevent sewage spills that have blighted lakes, rivers and coastal waterways. Critics complain that the companies created the problem by putting off needed upgrades while taking on billions of pounds of debt and paying generous dividends to their investors.

“Let me be very clear to water companies," Ofwat Chief Executive David Black said. “We will be closely scrutinizing the delivery of their plans and will hold them to account to deliver real improvements to the environment and for customers and on their investment programs.”