Negotiations are understood to be focused on jobs won by the £120m turnover company’s subsidiary Land and Marine Project Engineering.

The talks were ongoing as Amey-owned Enterprise stepped in to take over Daniel’s contracts at Welsh Water.

Daniel’s other major water industry clients, United Utilities and Bristol Water, also have both agreed with administrators to keep  jobs going while new contractors are sought to take on the work.

As a result of this 990 jobs look to have been safeguarded from the 1,300 strong workforce at the group, which saw the first wave of 124 staff jobs cuts announced yesterday.

Deloitte also confirmed yesterday it had received “several expressions of interest” for the Land & Marine business, which is highly regarded in the industry.

Land & Marine’s order book is particularly prized and looks set to be novated to contractors if a deal cannot be struck for the assets and work of the business.

Its main jobs include gas compressor work at St Fergus, a major LNG pipeline project on the Isle of Grain, gas pipeline upgrades for Wales and West Utilities as well as a combined heat and power project in Southampton.

An insider told the Enquirer: “Murphy came second on the Isle of Grain job for main contractor CB&I, so it looks like its theirs for the taking.

“Murphy also made an approach to Daniel management about an offer for Land & Marine before the administration, so they look poised to take a few contracts at the very least.”

Murphy and administrators Deloitte declined to comment about talks.

Both Daniel Contractors and Land & Marine fell into administration on Wednesday after the group management team lost a two-week long battle to keep the group afloat.

The alarm was raised after staff complained they had not been paid on some sites and a spate of payment disputes with subcontractors. Plant hirers like Gap and Select Plant also pulled kit off jobs around the country over a week ago.

Daniel Contractors ranked among the top 100 contractors and is one of the highest-profile victims of the post-credit crunch downturn in construction.