Directors of the construction group Carillion, which is on the point of collapse, are to make an 11th-hour plea to creditors to save the company after the government looked like it will not step in to rescue it.
Sky News reported that urgent talks were being held to stave off the group going into administration, as the group sought short-term support.
Its lenders like Barclays, HSBC and Santander UK are reluctant to provide the funding of £300m required without backing from the government. which has said it would not give any special support.
However, insiders have told Sky that there be a chance lenders might change their mind.
The collapse of the Wolverhampton-based group could open Theresa May's government up to considerable fallout as it maintains half of the UK's prisons and is the second largest supplier to Network Rail.
The group, which has 20,000 employees, had been given the contract to build HS2, as well as a number of schools and hospitals. Ministers have been drawing up plans for its collapse as it would have a significant knock-on effect on infrastructure for prisons, hospitals, transport and schools.
The government pays Carillion about a third of its annual revenues, or around £1.7bn, but is now struggling with £900m debt and a pension hole of around £590m.
It has been hit by cost overruns on public-private partnerships like the £350m Midland Metropolitan Hospital in Birmingham and the £745m Aberdeen bypass.
Politically, question marks have been raised over why the contractor got hundreds of millions of dollars worth of contracts from the UK government even after it had issued a number of profit warnings.
Despite a profit warning, it was given part of a £1.4bn contract to work on the HS2 line and after a second profit warning in November, was awarded a £62m Network Rail contract.
Jon Trickett, the shadow Cabinet Office minister, said according to the Times: "It raises serious questions about the competence of (transport secretary) Chris Grayling but also the government too."
The TUC says the government must "step in" to "guarantee jobs and services".
Deputy general secretary Paul Nowak said: "Tens of thousands of jobs are now at risk, along with vital public services and major infrastructure projects across the country," the BBC reported.
A government spokesman said it was monitoring the situation "while working to ensure our contingency plans are robust", the Times reported.