The move will see the group wind-down its limited companies including Lumsden & Carroll and Stephen Easten Building as they rebrand behind the Esh logo.

Chief executive Brian Manning said the move would not mean any immediate job-losses among the 1000-strong workforce.

He told the Northern Echo: “As far as I am concerned contracting is going into recession now and we need to streamline the business to get the name of Esh out there.

“Its like climbing up a wall and hanging on for a bit. We are hanging on but it could be two to three years before things improve.

“This is a strong business, so if we are finding it tough then God help other firms in the region. Sadly, Im not surprised when I hear of well-established names going out of business. If you take work at untenable margins then the chickens come home to roost Im afraid.”

Esh saw annual turnover rise by £35m to £169m last year and operating profits up £200,000 to £5.9m.

Manning said: “In 2010 our contracting side did well but 2011 does not look very good at all. We will use the good name of Esh and the clout that is has in the market to win more work.

“A lot of North-East public procurement projects go to big national names from outside the region. Like it or not it seems that size does matter.

“We are answering that challenge by bidding for work as Esh Construction. Our individual brand names like Lumsden & Carroll wont disappear, but as companies they no longer exist.

“Streamlining wont mean redundancies, but if the market dips in any sector then job cuts could occur. I am quite a realist.

“Most people like to put a positive spin on things, and the positive message is that we have done really well in 2010 and are very strong cash-wise. But it would be wrong of me to deny that the construction sector is under massive pressure to find a sustainable workload.

“Fortunately, at Esh Group, we have been prudent in the good times and have some ‘fat on our bellies’ to see us through the next two to three years.

“However, we are still exercising extreme cost control and we will make further cuts in order to conserve reserves if and when necessary. It is only by being this pragmatic that we’ll get through these extremely tough times for construction companies.”