London based Phoenix is a major creditor of ISG with the firm owed £20m by the defunct contractor’s fit-out arm alone.

Phoenix issued a message to “valued members of our supply chain” last month assuring them that the company was “well prepared to handle the current situation.”

But now some of those suppliers have been served with letters stating that they won’t get paid anything for work because Phoenix has not been paid by ISG.

One angry subcontractor said: “We were told that everything would be OK and now it turns out we won’t be getting paid anything.

“The financial hit is just being passed down the supply chain thanks to a pay less clause buried in their contract terms.”