Carillion collapse: Ministers hold emergency meeting
The construction giant, which provides services for schools, prisons and hospitals, has gone into liquidation, threatening thousands of jobs.
An emergency Cobra meeting was planned for 18:30 GMT to deal with the fallout.
Carillion ran into trouble after losing money on big contracts and running up huge debts of around £1.5bn.
The government is stepping in to pay employees and small businesses working on Carillion’s public contracts, said cabinet minister David Lidington.
“The action we have taken is designed to keep vital public services running rather than to provide a bailout on the failure of a commercial company,” Mr Lidington told parliament.
Carillion, the UK’s second biggest construction firm, was also involved in major projects such as the HS2 high-speed rail line.
The firm has 450 government contracts, including maintenance for prisons and hospitals, as well as dinners and cleaning for hundreds of schools.
It is also the second biggest supplier of maintenance services to Network Rail, and it maintains 50,000 homes for the Ministry of Defence.