The firm was run by David Jones, the president of the National Specialist Contractors Council, which campaigns for fair payment in the supply chain.

Details have not yet emerged about the circumstances of the £5m turnover firm’s failure. It employed around 35 staff working for main contractors mainly in the north.

Since being set up nearly 30 years ago, the suspended ceiling and dry lining specialist weathered the payment problems of the eighties, and the prolonged slowdown of the early nineties.

But the severity of this downturn and widespread suicide bidding is understood to have tipped the firm over the edge.

Earlier this week economic forecasters at the Construction Products Association warned the industry was in the throes of its severest downturn for 30 years.

Jones worked at the business for 23 years and was well known in the sector.

Before becoming NSCC president he was also president of the Association of Interior Specialists from 2007-2009.

David Frise, chief executive of the AIS, told the Enquirer: “This is very sad news, the firm was successful for many years and it is an indicative of the pressure specialists are under at the moment.

“Many firms are running fast just to stand still. You can only do it for so long, then one day you just run out of energy.”

Suzannah Nichol, chief executive of the NSCC, said: “This shows just how hard and deep this recession is on good specialist businesses.

“For many people like David’s construction is not just a job, it is their life and very personal.”