SHARES in under-threat construction giant Carillion plummeted by one-third after reports emerged lenders refused to back a proposed rescue plan.

The UK Government, stakeholders and pension authorities met yesterday in a bid to negotiate a package to prevent the private firm’s collapse.

Carillion, which is involved in major infrastructure projects in Scotland and the rest of the UK, has debts of around £900 million and a pension deficit of £590m. Shares slumped by 26.5 per cent to 14.7p following reports that creditors, including the Royal Bank of Scotland, had rejected a proposed rescue plan tabled on Wednesday.

Calling for protection for the company’s 19,500 workers, Gail Cartmail, Unite union assistant general secretary, said: “The Government must consider all options while the future of Carillion hangs in the balance, including bringing contracts back in house.”

As well as involvement in the £56bn High Speed 2 rail project, Carillion – which has bases in High Blantyre and Leith – holds key contracts in Scotland. This includes a £23m deal to extend platforms at Edinburgh Waverley train station.

The Wolverhampton-headquartered firm is also working on the £745m Aberdeen bypass as part of the Aberdeen Roads Limited joint bid, a partnership with the Balfour Beatty and Galliford Try construction firms.

Network Rail and Transport Scotland have declined to comment.

Carillion is also involved in two UK-wide Ministry of Defence contracts for facilities management that cover almost 20 Scottish sites including Dreghorn Barracks in Edinburgh.

A UK Government spokesman said: “Carillion is a major supplier to the Government, with a number of long-term contracts.

“We are committed to maintaining a healthy supplier market and work closely with our key suppliers.

“The company has kept us informed of the steps it is taking to restructure the business. We remain supportive of their ongoing discussions with their stakeholders and await future updates on their progress.”

Carillion declined to comment but the Pensions Regulator said: “We have been and remain closely involved in discussions with Carillion and the trustees of the pension schemes.”

Rehana Azam of the GMB union said: “We seek transparency about the scale and nature of jobs and contracts which Carillion outsource to other subcontractors to evaluate how the collapse of the company could impact on infrastructure projects, the public sector and the wider economy.

“Government needs to consider urgently a public-sector vehicle for taking on this vital work.”