ISG confirmed the moves in a trading statement to the City today covering the period since July 1.

The firm said trading had been “resilient” as UK construction kept turnover steady but suffered a fall in margins.

ISG first revealed problems at its South West operation in September when it dragged down operating profits and was restructured at a cost of £2m.

The firm said today: “Regional disparities continue to widen with the South East and London enjoying a markedly stronger flow of work opportunities that will allow us to offset the significant negative problems we previously identified in the South West.

“As a consequence of this disparity we have also downsized our North East business and discontinued our Affordable Housing activity in the South West.

“We expect the remainder of the South West business to return to profitable trading by the year end.”