Jeremy Corbyn would reportedly try to renationalise water companies if he came to power, according to leaked internal documents, in a plan which could see him pay up to £24bn less than their market value.

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The Labour leader's plans could cause pensioners, employees and shareholders in Britain's water firms to lose half their value in the companies, if a blueprint reportedly circulating around the party's front benches is implemented.

Labour has long hoped to renationalise public services under its current leader, but the document reveals the scale of the planned asset grab on the sector, according to the Sunday Times. It could pay compensation of less than £20bn for water companies valued at around £44bn by conservative estimates, and up to £90bn if debt is included.

But analysis by Moody’s, the rating agency, estimated the book value of the water companies in England to much lower than this, at just £14.5bn, the Financial Times reported last month.

The Labour briefing paper reportedly states compensation would be "a political process of negotiation with shareholders" which would take into account state subsidies, pension fund deficits and "asset stripping since privatisation".

"The final level of compensation may well be less than this [20bn]". Shareholders and lenders would reportedly receive government bonds in return.

"Shareholder investment on the books of UK water and sewerage companies is less than £20bn," the paper reportedly says. "We think this is a better place to start than market values because it reflects how much shareholders have actually put into the company, and doesn't incorporate future expected profits".

A Labour party spokesperson said: "Water bills have risen 40% in real terms since privatisation. In the last ten years, water companies have paid 1,000 times more in dividends to their shareholders than in tax. Some have even paid more in dividends than they have made in profit, running up debts that are passed on to bill payers.

"Labour will fix this broken system by bringing the water companies back into public ownership, saving households £100 per year on their bills."

It comes after both Labour and the Conservatives lost swathes of local council seats in last week's elections, as Corbyn and May continue trying to hammer out an agreement on how to proceed on Brexit.

The Tory party lost more than 1,334 councillor seats, as well as the control of 49 councils throughout the UK.

It was the worst performance from the governing party in a local election for 24 years.

Read more: Theresa May heckled at Tory party conference

Labour also suffered, losing six councils and 86 seats, in what has been suggested is frustration at both parties for their lack of progress on Brexit.