Government in crisis talks over company that provides vital services to schools

Media playback is unsupported on your device                  Media caption Bailing out Carillion'would send the wrong message, Vince Cable says

Media playback is unsupported on your device Media caption Bailing out Carillion'would send the wrong message, Vince Cable says

The plunge comes as the Press Association reported that lenders to the construction giant effectively rejected a rescue plan proposed Wednesday.

A Government spokeswoman said: "Carillion is a major supplier to the Government with a number of long-term contracts".

The consultancy EY has been put on notice in case the company falls into administration. It employs 43,000 people globally.

Ministers from the Justice, Transport, Culture, Health, Education and Communities departments and ministries were also present, the Financial Times reported.

It is also one of the biggest suppliers of maintenance services to Network Rail and manages schools, roads and prisons.

"Handing Carillion bosses a blank cheque bail-out is completely unacceptable", Ms Azam said, adding that the company had an "abysmal" track record on protecting workers.

Gail Cartmail, Unite assistant general secretary, said Carillion's workforce was being "held hostage by the whims of the market".

The firm is now under investigation by the Financial Conduct Authority over the "timeliness and content of announcements" made between December 2016 and July 2017.

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The Government is notoriously slow at settling bills with contractors, and frequent delays have exacerbated Carillion's cash crunch.

Carillion was forced to ask its banks, which include Santander UK, HSBC and Barclays, for support after breaching its loan agreements past year when it issued a series of profit warnings.

Adding to the pressure on the small cap firm - which issued three profit warnings in less than six months a year ago and has seen its market value collapse by 90% - was a recommendation from broker Peel Hunt to sell the stock ahead of forthcoming newsflow.

The PPF, which would take on responsibility for paying pensions to thousands of current and former Carillion workers if it collapses, said: "The PPF is aware of the discussions between the company, Government and banks and, along with the Trustees and the Pensions Regulator, will act as it always does to protect the interests of Carillon scheme members and levy payers".

A Government spokesperson repeated a statement given to Sky News last weekend which said it was "committed to maintaining a healthy supplier market and work closely with our key suppliers".

Shadow business secretary Rebecca Long-Bailey said: "The collapse of Carillion could provoke a serious crisis".

The Pensions Regulator would not comment on whether it was attending specific meetings, but a spokesman said: "We have been and remain closely involved in discussions with Carillion and the trustees of the pension schemes as this situation has unfolded".

"We will not comment further unless it becomes appropriate to do so".

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