Around 70 staff will be laid off as administrator Grant Thornton takes over at the company.

Managing director Peter Askew told the Enquirer: “We’ve had a few tough years but our pipeline of work was looking a lot better than it had been for a long time.

“Our main gripe is with our bank which cut our overdraft by around 40%.”

The firm has collapsed with more than 100 creditors left in limbo.

It is hoped some of the workforce at the firm’s Clyst St Mary base will be kept on to complete a small number of ongoing construction projects.

MTC entered a company voluntary arrangement (CVA) in April 2008, when its creditors agreed to a five-year repayment plan on £5m of debts.

These stemmed from a long-running dispute with Sir Robert McAlpine over payment for work MTC carried out as a subcontractor on the redevelopment of Princesshay.

But Askew said the firm’s current problems were largely due to the recession impacting on its workflow and the refusal of its bank to extend its credit facilities.

A  few years ago MTC ‘s turnover was around £20m but this dropped to £10m this year with staff levels contracting from around 120.

MTC’s directors have invested more of their own money in an effort to keep the company afloat but the situation grew critical when talks with the bank reached deadlock three weeks ago.

Despite losing money, MTC had a healthy order book, including a £2.5m contract for Ocean Fish in Roche, Cornwall, which will not go ahead.

The business was founded in 1969 when Michael Thorne began manufacturing farm trailers in a redundant Nissen hut.

The firm grew to become one of the region’s leading local construction firms by specialising in industrial and agricultural complexes, leisure centres and school building extensions.