NETWORK Rail contractor Jarvis has announced that it will go into administration and has suspended its shares, after it failed to secure further credit. There are now fears that the jobs of 2000 Jarvis employees could be at risk.

Jarvis said it had 'no option', and is blaming 'very considerable reductions' in business. In a statement, the York-based company said the reduction of track renewals by Network Rail in 2009-2010 had been a factor. Network Rail has deferred almost 30 per cent of renewals to future years while it continues to refine its efficiencies.

The company said that, after negotiations with its lenders, it had become clear 'that sufficient support will not be extended to the company to enable it to continue trading as a going concern'.

It issued a profit warning last month, forecasting an operating loss of £5 million. In November it had announced a loss of £3.6 million for the first six months but had remained optimistic, with the Directors saying that performance was still 'slightly ahead of management expectations'.