The firm said it would complete enabling works but not take on the main build contract as was expected.

The decision by the client and contractor to part company looks like the latest in a string of projects where high cost inflation has seen builders fail to agree a final lump sum price in final contract negotiations.

Just last week Bouygues, which has been lined up for a £65m project for the Great Ormond Street children’s hospital in London, failed to agree the final price during second stage negotiations forcing the client to go back to the market.

Cambridge University said it would be announcing a new contractor in due course to take forward the £39m project to create a new examination hall and student hub.

A spokesperson for the contractor said: “Morgan Sindall is completing the enabling works on the North Range project for the University of Cambridge. We had bid to deliver the full scheme but did not get to the stage of being awarded the contract.” 

The North range buildings project on the New Museum site in the city is one of two projects Morgan Sindall has on the go with the University.

It started work on a £60m genome research building at Granta Park in Cambridge last Autumn and last year completed a new £40m chemical engineering and biotechnology facility.

University is turning to a new contractor to deliver the main works

The student hub project involves a complex mix of restoration, alterations and new buildings, working with both new-build and existing listed buildings.

Morgan Sindall has demolished the Examinations Halls Building to provide space for a major new building in its place. The project also includes refurbishing the Grade 2 listed arts school and ground floor of the Old Cavendish Labs (East and Raleigh Wings).

A University spokesman said: “Following the imminent completion of the enabling works (Phase 1) of the North Range Student Services Centre project on the New Museums Site by Morgan Sindall, the University has chosen to engage another contractor, name to be announced, to complete the work.”