The Enquirer warned last week that the firm was battling for survival, but the directors have given up the fight and called in administrators from RSM Tenon.

The administrators will handle the GAJ holdings and two other main operating companies G.A.J Construction and GAJ Planned and Reactive Maintenance.

These business which specialised in school building and repairs work together turned over £18.5m.

Bev Marsh, director at RSM Tenon, said: “It appears that the group’s situation has been caused by a combination of factors.

“Not only has the economic downturn spelled disaster for a number of regional and national firms in the construction sector, but with public spending cuts GAJ had suffered from the reducing numbers of tenders in the market.”

Earlier this year, RSM Tenon warned about the ‘ripple effect’ in the West Midlands, where smaller firms in the region were fighting for survival following the collapse of construction giants Connaught and Rok.

Marsh added: “What we are seeing in the construction sector is the result of a ripple effect right across the supply chain.

“When a large business fails, the knock on effect can be devastating as it can filter right through the whole industry – it is not uncommon for failures of businesses four or five levels removed from a large failure to occur 12 months or more later on.”