A deal would come as a consolation after Balfour estimated it would be hit for £45m having to fulfill joint venture projects commitments with Carillion on road jobs including the Aberdeen Western Peripheral Route project and A14 in Cambridgeshire.

Leeds City Council selected Carillon as preferred bidder to deliver three roundabouts worth around £7m and entered into an early contractor involvement deal for the £80m contract to deliver 7.5km of dual carriageway.

The decision just a week before Carillion’s demise raised eyebrows given its widely publicised problems and the fact that there was nothing to choose between the Carillion and Balfour Beatty bids.

Leeds Council are understood to have plumped for Carillion because of the higher direct delivery element in its bid.

The council now plans to review the tender process before determining how to proceed. It is considering using the existing procurement exercise to secure an alternative contractor or re-tendering.

Tom Riordan, Leeds City Council Chief Executive, said: “While Carillion were the preferred bidder for the ELOR work, a final contract had not been signed off.

“The contingency plans in place reflect the fact that we had been monitoring Carillion’s situation and planning accordingly.”