WATES is having its role in a £150 million partnership deal with Durham Council scaled down after struggling to cope with the workload.
Additional contractors will be appointed to the council's strategic alliance as early as April 2005.
Brian Tennant, who is managing the deal with Wates for the council, said: 'Things were starting to slip both in terms of cost and some quality issues.'
Mr Tennant said Wates had completed around 100 jobs below £1 million before the decision had been taken. Other contractors are now needed to carry out this work, but larger firms will also be drafted in to share the higher-value jobs.