The move follows an announcement in April by the council that Morrison was also being dumped early from its maintenance deal.

Wates is one of five contractors currently responsible for major works to council properties in Southwark.

The council said its deal covering Bermondsey and Rotherhithe will come to an end through “mutual agreement”.

Southwark is making changes under its “Fairer Future ” programme to extract maximum value for its services.

Councillor Ian Wingfield, cabinet member for housing at Southwark Council, said: “This council is determined that the way it delivers housing services, of all kinds, should focus on the needs of our residents first.

“This means that we will always strive to deliver what residents want and need for their homes, to always offer value for money for them, and to ensure that works continue to be of the highest standard.

“With these promises comes a responsibility for us to continually review the way in which major works are delivered, and to make any changes we feel are needed to uphold these promises to residents.”

Stuart Laird from Wates Living Space commented “ We have worked hard in partnership with the Southwark Council to try and bring this project in line with the council’s Fairer Future vision.

“However, we were unable to feasibly deliver the project and have mutually agreed that the current agreement should end.

“It is with regret that we will not be working with Southwark Council on this project, but we very much look forward to working with the council in the future.”

Residents will now be consulted on the retendering of the contract.