Construction costs soared by £95m to £250m on the delayed job where Interserve was replaced by Doosan Babcock in late 2016 to finish the scheme.

Viridor has been chasing a claim for more than a year and confirmed it is now seeking arbitration with Interserve.

Viridor’s parent company Pennon said: “As previously reported, the rectification and completion costs exceeded expectations and Viridor are contractually entitled to recover incremental costs from the original principal contractor Interserve Construction Limited. 

“We have now issued arbitration proceedings to progress legal recovery of the debt.”

Viridor is claiming £72m but has set aside a provision of £28.7m “having again considered the assessment of the Interserve credit risk.”