Carillion contractors will be able to apply for Government-backed loans as part of a £100m support package, Business Secretary Greg Clark has announced.

The construction giant crashed into liquidation under a debt pile of £1.5bn on 15 January, putting around 43,000 jobs at risk. As Britain's second-largest construction company, it manages a huge variety of public sector and private projects around the UK and its collapse was likened to the crisis that a decade ago rocked the banking sector worldwide.

Read more

The government has come under intense pressure to explain why it handed Carillion huge contracts, despite the fact that the company had issued three profit warnings in the 12 months to November.

Determined to get a grip on the Carillion crisis, the government has vowed to help thousands of small and medium businesses and individuals owed money by the failed outsourcing giant to get loans from the British Business Bank.

"We want to signal very clearly to small and medium-sized businesses who were owed money by Carillion that they will be supported to continue trading," Clark said.

"The banks have responded to my request by agreeing to support businesses and individuals affected.

He added: "This further guarantee will help those businesses who may not be able to provide the usual security for a loan."

The loans can be used to support overdraft borrowing and refinancing of existing debt, the department said.

Clark's announcement follows news that three high street banks will provide "tailored support" to contractors affected by the collapse of the company, which also maintains half of the UK's prisons and is the second largest supplier to Network Rail.

Although the British Business Bank is 100% owned by the government, it is managed independently and specializes in providing financing for smaller businesses.