But improved demand for residential and commercial property helped the property division to raise its performance and keep group pre-tax profits around the £17m mark.

At the transport and infrastructure business operating profits in the six months to June slid from £7.6m to £5.8m.

In the UK, transport revenue was down by 21% to £45m, driving down margins from 6.9% to 4.7%.

Chris Cole, chief executive, said: “In the UK we are seeing the early stages of a slowdown in many parts of the public sector with certain projects being cancelled and others deferred pending the outcome of the October spending review.

“We continue to monitor these developments closely and will take such actions as are necessary to protect our business.”

Presently WSP is consulting highways staff about redundancies but has not disclosed how many jobs are  at risk.

More than a year ago it laid off around 1,000 staff worldwide, about 10% of the workforce, with around 120 jobs going in the UK.

He added that WSP’s diversification into water  and rail would help to offset the downturn in road spending.

Cole said: “We are confident in the outlook for our substantial European operations and in particular Sweden where the great majority of our European revenues and profits are generated.”