The Nottinghamshire based construction group said the problem job would see its building division make an overall loss of £250,000 at the end of the year.

North Midland Building projects secured this year include construction of one of the largest private houses to be commissioned in this country in the last few years, Buxton fire station,  and an extensive office building refurbishment for Severn Trent Water and Pera in Melton Mowbray.

In a trading statement, the firm said that profitability for the group up to the third quarter was ahead of last year despite a reduced level of tendering opportunities and extremely competitive margins.

Its utilities busines is expected to perform well on the back of increased demand for broadband and a key contract with Carillion/Telent for BT work in the East Midlands area has recently been renewed.

The joint venture £147m contract with Biwater at Minworth Sewage Treatment has now finished and both the civil engineering division and its Nomenca M&E firm will get a big bonus payment for delivering the project below the client’s budget.

Analysts previously forecast North Midland would deliver a £3.4m profit before tax on revenue of £184m.