The £27m turnover civils contractor operates from offices in Middlesbrough and Leeds throughout Yorkshire and the North East.

Most of its work was for major house builders, like Persimmon, Keepmoat, Strata and Redrow, but it also built up a track record of working on school projects across the North East.

Administrators from Baker Tilley’s Sunderland office are handling the company and looking at novating contracts.

Newly-formed Stockton-on-Tees firm Applebridge Construction is rumoured to be among companies in talks with the administrators about taking on jobs and some of the workforce.

The firm was set up by 41-year-old John Hughes 20 years ago and was sold to his cousin Donal, who led a management buyout about 18 months ago.

Credit reference agency Top Service said it started to receive reports of non payment in July from around 25 of J Hughes Construction’s customers.

A spokeswoman for Top Service said: “Our customers noticed slowing payment terms earlier this year and due to an increase in reports of non payment, we took to decision to remove the credit limit and send our customers an early warning notification some weeks ago.”