Railway maintenance contractor Jarvis today revealed it was calling in administrators following a plunge in rail and plant work.
About 2,000 jobs are now under threat at the York-based contractor, which is chaired by former Conservative minister Steven Norris.
The company said it had suffered “very considerable reductions” in business since the recession struck.
“Trading conditions have been, and continue to be, difficult,” the group said.
Jarvis added: “During this period the board has been focussed on improving the financial position and the long-term viability of the company for the benefit of all of its stakeholders.
“The successful achievement of this goal depended upon the continued support of key customers and creditors (including the lenders under the company’s secured working capital facility and Network Rail), and the ability of the company to win new work. The recent success in being awarded the Chiltern Railway’s Evergreen 3 Contract was therefore encouraging.
“However, following negotiations with the company’s secured lenders, it has today become clear that sufficient support will not be extended to the Company to enable it to continue trading as a going concern.”
The group, which was once the UK’s biggest construction company, issued a profit warning last month, forecasting a full-year operating loss of £5 million. The company has now suspended its shares.