The move follows Costain’s decision to announce that it planned a £178m merger with the Norfolk-based contractor to create a £1.6bn turnover contracting giant this morning.

But Kier has issued a statement to shareholders claiming a merger with it would generate greater value.

The rival move echoes Costain’s failed takeover of Mouchel. This saw Interserve table a rival bid once Costain had broken cover about making an offer for the consultant. In the end the management convinced shareholders to reject both bids.

A statement from Kier said: “Kier holds May Gurney in high regard and views it as a good quality support services business with a range of services which complements Kier’s existing offering.

“Kier believes that a combination of Kier and May Gurney would create significant value for shareholders, establishing a market-leading and well-balanced business.

“The enlarged group would offer an unrivalled range of services to Local Authorities as well as providing Kier with greater access to the regulated sector.”

The firm added: “To that end, Kier has made previous attempts to discuss a potential combination with May Gurney and has been monitoring the business’ recent performance. In light of the announcement, Kier is considering its options.”