CLEVELAND Bridge has admitted it is talking to rival William Hare about teaming up to bid for future projects, such as the Heron tower.
The firm's Darlington factory is fabricating around 5,000 tonnes of steel for a petrochemical plant Hare is helping to build in the Gulf state of Qatar.
But CBUK president Jon Dale dismissed speculation that Hare was set to snap up the troubled firm and add the Darlington site, as well as its 260 staff, to its factories at Bury and Scarborough.
Mr Dale said: 'We're doing some subcontract work for them because they asked if we could help out.
'We're talking to them about bits and pieces in the future and we've had a fairly good relationship with them in the past.'
Any deal to buy CBUK - which according to its results recently filed at Companies House posted a £12 million pre-tax loss on a turnover of £25.6 million in 2005 - would depend on the firm sorting out its multi-million pound dispute with Wembley stadium builder Multiplex.
One rival boss said: 'Would anybody want to buy that dispute? A lot of things have to happen before a sale goes through.'
CBUK expects to hear either side of Christmas whether it has been successful with its oral hearing challenging the verdict that it broke the law when it walked off the Wembley job over two years ago.
The firm has already had its first challenge to the verdict knocked back when in August an appeal court judge refused it the chance to take its case to the Court of Appeal.
Mr Dale and his opposite number at Multiplex, Martin Tidd, have held a number of face-to-face meetings to try and reach an out-of-court settlement.
But no more meetings are planned at the moment and the pair are due to go to court again next March to decide which firm owes what.
Multiplex is pressing for up to £20 million in compensation.