UNIONS are calling on the Government to give assurances to workers at Interserve after the outsourcing giant revealed it is seeking a rescue deal.

Shares in the Government contractor plummeted after it said shareholders are likely to see their stakes diluted as part of a plan to cut its debt.

It emerged over the weekend the company, which holds contracts for a range of services in prisons, schools and hospitals, was holding talks with lenders over its

£500 million debt pile.

Unions voiced fears that workers could be facing a repeat of the collapse of Carillion at the start of the year which led to thousands of job losses.

Gail Cartmail of Unite said: “The financial difficulties that Interserve finds itself in is another dire warning of the dangers of outsourcing public services for private profit. We could be facing Carillion Mark Two. The mistakes made before the collapse of Carillon in January 2018 appear in danger of being repeated – if so, this could see the hard pressed taxpayer picking up the tab – yet again.

“We want to know from ministers what contingency plans are in place should Interserve be unable to restructure its debt-laden finances.

“We would support a temporary ban on Interserve bidding for public sector contracts, while it attempts to resolve its financial problems.

Kevin Brandstatter of GMB said: “It should come as no surprise that another public sector contractor is in significant financial trouble.

“Neither industry, government, local government nor NHS have learned anything from the collapse of Carillion nearly a year ago.

“GMB demands the Government step in and gives assurances to our Interserve members.

“It’s not their fault the Government’s outsourcing model is completely broken and they do not deserve to go into the festive period worrying about their futures. GMB calls on the Government to bring all contracts in house and use the money saved to improve public services.”

Mick Cash, leader of the Rail, Maritime and Transport union,

said: “RMT is calling for immediate action to begin transferring the Interserve transport sector contracts in-house to avoid a repeat of the Carillion chaos.”