Thames Water is to cut 300 jobs.

The UK’s largest water and sewerage company blamed the economic downturn, which has reduced revenue, but also said the move was part of a restructuring programme.

It hopes to secure many of the cuts by voluntary redundancy but has not ruled out compulsory layoffs.

The utility business employs more than 5,000 people and serves 13.6 million customers across London, the Thames Valley and North West Kent.

The job cuts will affect all areas of the business, but most will come from support functions mainly in Reading and Swindon. The savings are estimated at £7m. Thames Water said that customers would see no reduction in services.

The company came under new management at the end of 2006 following criticism of service standards. It has been undergoing what it calls a "remodelling" of its business to meet future challenges.

Chief executive officer David Owens said : "A number of redundancies had always been planned as part of this restructuring process, however, the recession, which is reducing our revenue, and driving up borrowing costs, has meant that we have had to bring this redundancy programme forward. This should allow us to reduce running costs while maintaining our services to customers."

The GMB trade union is expected to fight the decision. Gary Smith, GMB National Secretary, said: "GMB want to meet Thames Water to discuss these job cuts. We will take some convincing that there is an economic case for these job losses