A Labour government would pursue water giants that move shareholdings offshore in an attempt to escape nationalisation, John McDonnell has revealed.

The shadow chancellor said his Treasury team would “find a mechanism” to claim ownership of stakes held by investors seeking protection from nationalisation by using overseas treaties.

Pension and insurance giants with stakes in water companies such as Yorkshire and Anglian have shifted shareholdings to Hong Kong as a safeguard against Labour’s plan to seize control of the sector. If Labour came to power, they would hope to take shelter under bilateral treaties, such as the one between Britain and Hong Kong, designed to protect against state expropriation of assets.

In a wide-ranging interview, McDonnell said Labour would “take appropriate action” to ensure it