Cameron’s latest move comes as the Prompt Payment code continues to be ignored by great swathes of the industry.

The new round of consultation will look at strengthening the code and the possibility of extra penalties for late payers.

Cameron said: “It’s not right that suppliers are not getting paid on time for the work they do and the services they provide and I know that late payment can have devastating effects on our small and medium sized businesses.

“The government has already taken steps to help address this issue but I am clear that more needs to be done to build a business culture across all sectors of the economy that sees the fair, prompt and reliable payment of suppliers become a core corporate responsibility which is taken seriously at the most senior levels.”

Barry Ashmore, managing director of pressure group StreetwiseSubbie, said: “How can it be acceptable, that at the end of a publicly funded job, the main contractor can say to the specialist contractor, with little or no credible proof, ‘you delayed us for nine weeks and you caused us to incur £300,000 of additional costs, which we are going to set off from what we owe you – and by the way, you now owe us £200,000’. It’s ludicrous.”