Hundreds of undergraduates are receiving compensation due to “disruption” caused by Hutton Construction’s contract to convert an old boiler house into a new teaching area.

Students living at two halls of residence at the university’s Wivenhoe Park campus are receiving the payment, in the form of a £500-a-term reduction off their rent for being woken-up at 7am.

Others living a little further away are receiving a £100-a-term reduction following an anti-noise demonstration by the Student Union.

The compensation scheme has attracted criticism from local residents.

One letter to the local newspaper said: “Welcome to the real world where Mummy does not gently rouse you at midday. You are there to learn, not lie in bed all day.”

A university spokesman said: “The payments have been made to residents nearest the building work in recognition of the disruption they have suffered.”