BRITAIN’S only remaining train builder, Bombardier Transportation, has been forced to lay off 77 workers at its Derby factory — despite having a full order book — because some of its suppliers have had credit facilities withdrawn by their banks.

In one of the strangest examples so far of the perverse effects of the credit crunch Bombardier, which has had all its production lines working at full capacity, said banks have put such a squeeze on credit that supplier firms are finding it impossible to borrow to pay for extra equipment and employees to meet Bombardier’s growing demand for components.

Sidings at the factory in Litchurch Lane, Derby, are now starting to fill up with part-built trains — which operators such as First CapitalConnect, London Overground and Southern are desperate to get into service.

Even more ironical, Bombardier now faces paying compensation — “liquidated damages” — to these train operators for late delivery of the new trains.

Bombardier confirmed on 19 January that it had laid off 77 temporary staff for at least two weeks.

Further lay offs have only been avoided by Bombardier’s decision last week to buy one of its key suppliers, Time 24, which employed 167 people in Derby to provide wiring looms.

Until the complex electric wiring systems have been installed, no other internal fitting out of trains can be carried out.

Completion of trains is now being held up awaiting supplies from sub-contractors of other items such as toilet modules and corridor connections.

Neil Harvey, Bombardier's director of communications, said: “Some trains are virtually built but they are sitting waiting for components.

“We can't finish them off until the supply chain catches up, so we've had to slow down production.

“We have to protect our permanent employees first. As with any temporary staff there's never any guarantees of work.”

Mr Harvey added: “In better times, some of our suppliers might be able to increase production capacity by investing. But the credit crunch means there is no money about.

“A lot of smaller businesses are struggling because there is no access to cash. We are hoping we can work with them to alleviate the situation.”