Profit-sharing

Glas Cymru is promising to reduce water charges for Welsh Water customers, which are among the highest in the UK.

It launched what was described as a "people's bid" back in November 2000, pledging to take over Welsh Water from its present owners - Western Power Distribution - and run it on a non-profit making basis.

Instead of paying dividends to shareholders, cash surpluses would be shared with customers.

The company has promised to reduce water charges for Welsh Water customers, which are among the highest in the UK.

Controversial

The board of Glas Cymru includes a number of current and former directors from the old debt-ridden Hyder group - a UK-listed water and electricity business which became financially overstretched and was bought out last year.

The unusual financial structure of Glas Cymru has made this bid a controversial one.

Instead of shareholders the company will be controlled by a group of 200 or so members - led by some some prominent names from the business world.

They include Geraint Talfan Davies, former controller of BBC Wales.

Hostile takeover

The purchase price - nearly �2bn - would come from selling bonds in the City of London.

Other water companies have been planning similar arrangements - which makes the ruling an important one for the future shape of the industry outside Wales too.

Welsh Water, which supplies water and sewage services to nearly 3m people, was part of the Hyder group which fell victim to a hostile takeover by the US company Western.

Welsh Assembly First Minister Rhodri Morgan welcomed the news of the go-ahead.

"I particularly welcome the prospect of Welsh Water being owned once again by a company based, managed and controlled from Wales, based on a principle originated in Wales," he said.