Carillion has collapsed after its banks lost faith in the construction and services company, forcing the British government to step in to guarantee major public works contracts.
In one of the biggest British corporate failures in recent years, Carillion went into compulsory liquidation after costly contract delays and a slump in new business left it swamped by debt and pensions liabilities of around STG1.5 billion ($A2.9 billion).
The demise of the 200-year-old business poses a headache for Theresa May's government which had employed Carillion to work on 450 projects including the building and maintenance of hospitals, prisons, defence sites and a high-speed rail line.
The government's priority is to ensure that public services are not disrupted, said David Lidington, the minister in charge of the Cabinet Office which oversees the running of government.
Lidington urged the company's staff to continue to work and said the government would pay their salaries.
Although the government has promised to support workers and ensure contracts are delivered, it has stopped short of bailing out the company as it did with major banks during the financial crisis almost a decade ago.
Carillion owed around STG900 million to banks which include the country's five biggest - RBS, Santander UK, Lloyds, HSBC and Barclays - and it has a pension deficit of STG580 million.
"In recent days we have been unable to secure the funding to support our business plan and it is therefore with the deepest regret that we have arrived at this decision," Chairman Philip Green said.
"This is a very sad day for Carillion, for our colleagues, suppliers and customers that we have been proud to serve over many years."
Employing 43,000 people around the world, including 20,000 in Britain, Carillion has been fighting for survival since July when it revealed it had written down the value of its contract book by STG845 million.
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