The £154m project for client Viridor is months behind schedule and has been dogged by a series of subcontractor issues.

Interserve revealed difficulties with three loss-making energy jobs during its latest results in February.

Now the contractor has confirmed the scale of the problems in Glasgow which will see the construction division “significantly adversely impacted” by a £70m exceptional provision during the first half of this year.

A trading statement from the firm this morning said: “Our expectations for the UK construction division as a whole have been significantly adversely impacted by a further deterioration in our Glasgow energy from waste contract.

“The issues relate to the design, procurement and installation of the gasification plant, together with continuing challenges with the supply chain that will result in further cost overruns and delays.

“As a result the Board anticipates a £70m exceptional contract provision to be taken in the first half of 2016, resulting in a similar level of cash outflow spread across 2016 and 2017.

“We will be pursuing every opportunity to mitigate this situation.”

Interserve said trading at all its other divisions was in line with expectations.

The company’s share price fell 24% on the news in early morning trading on Friday.