SOUTHERN Water, the utility that serves customers in Kent, Sussex and Hampshire, is for sale in a deal that could be worth around £4billion.

The Royal Bank of Scotland’s private-equity division is selling the water supplier and sewage disposal company it bought four years ago.

The decision follows a massive shake-up at Southern Water involving a rush of disposals and scores of staff transferred under TUPE terms to contractors as part of what the firm dubbed "assets reorganisation".

Staff were told about the imminent changes last year at a mass meeting at Brighton Racecourse.

Since then, the Worthing-based business, which serves two million households and numerous businesses, has sold Bewl Water to Simon Hume-Kendall, the owner of the Hop Farm Country Park, and outsourced IT services to India. Technical and engineering services have gone to W S Atkins.

Deutsche Bank has been appointed to advise on the sale, which will affect around 2,000 staff, including some at Capstone Road, Chatham, a site earmarked for housing development.

The sale could trigger a spate of takeovers in the water industry and shares soared across the sector.

The Competition Commission recently cleared a merger of Snodland-based Mid Kent Water and South East Water. Private equity firms are expected to be interested in Southern Water.