Business Secretary Vince Cable told the House of Commons that he could only launch a probe if hard evidence was produced that blacklisting had taken place since it was outlawed in 2010.

He said: “I am very happy to take this forward is there is any issue to investigate.

“It needs investigating if it is still going on – that is the essence of this.

“Are we talking about now or an investigation into history?”

Cable was responding to calls from shadow business secretary Chuka Umanna for a full investigation into construction blacklisting along the lines of the Leveson inquiry into phone hacking.

Umanna said: “I am flabbergasted by the Secretary of State’s response.

“Allegations have been made and need to be investigated.”

Umanna also called for contractors who used the disbanded Consulting Association to make a full apology and set up a compensation fund for affected workers.