LONDON, June 4 (Reuters) - Thames Water's senior

creditors said there was a "short and closing window" for a

market-led rescue of the water company after U.S. private equity

firm KKR pulled out of a multi-billion pound funding

plan on Tuesday.

The creditors said on Wednesday they had submitted a

long-term plan to fix the root causes of Thames Waters'

problems.

The heavily indebted water company, Britain's biggest, moved

a step closer to nationalisation on Tuesday when KKR walked away

from investing about 4 billion pounds ($5.4 billion) of equity.

The group of senior debt holders said they had a proven

track record of stewardship and could deliver "substantial fresh

investment" to turn around the company under new leadership.

"The Creditors believe that Thames Water requires an urgent

and fundamental reset and there is a very short and closing

window in which a market-led solution can succeed," they said in

a statement, adding that discussions with the regulator Ofwat

and the government would be advanced in the coming weeks.

They are being advised by corporate troubleshooter Mike

McTighe, who is a potential candidate for chairman if the

proposal succeeds, according to a source close to the creditors.

Thames Water in March agreed to postpone a challenge to the

regulator's decision on how much it could increase customers'

bills while it explored the potential equity raise. That

deferral is set to expire next month.

A spokesperson for Thames Water declined to comment on the

creditors' statement. It said on Tuesday, when announcing that

KKR had walked away, that it would "progress discussions on the

senior creditors' plan with Ofwat and other stakeholders".

($1 = 0.7389 pounds)