In the last few weeks Daniel Contractors struggled to pay staff and subcontractors on various jobs, fuelling rumours in the industry about the firm’s financial health.

Sources have told the Enquirer that Murphy and Dutch contractor A Hak have been linked with talks about taking on jobs or buying parts of the £120m turnover business.

According to a report in the Sunday Times yesterday the firm is teetering on the brink with Deloitte on standby to handle any decision to file for administration.

The Waring-based contracting group employs around 1,200 staff and owns Land & Marine, which it bought just over 10 years ago.

Daniel Contractors’ problems are said to stem from water work where it is struggling with tight margins.

So far this month the firm is facing three county court judgements for non payment, and plant hire companies are understood to have pulled kit off major Land & Marine jobs in Scotland and the Isle of Grain.

A Welsh Water spokesperson said: “We have a long-standing contract with civil engineering firm Daniel Contractors Ltd, which involves maintaining parts of our clean water and wastewater network across our operating region.

“We continue to liaise closely with the company’s management to ensure that services to our customers remain unaffected.”

United Utilities confirmed it had a metering and connections contract with the firm but referred all other questions to Daniel.

One source told the Enquirer: “There’s a lot of talk in the industry at the moment and the word is  Murphy has been talking to management about Land & Marine jobs.”

Daniel Contractors refused to comment and its website was down this morning.