BARNET Homes is cutting ties with a struggling building contractor over fears it may become insolvent.
On Friday, the council's housing body decided to cut the £7m-per-year contract with Connaught which is facing financial problems.
The contract to maintain all 15,000 council homes in the borough started in 2007 and will end in February 2011, 13 months early.
On Friday the Daily Mail reported a leaked memo from Barnet Homes saying it feared for future repairs if the contract remained with Connaught.
Shares in the building firm have plummeted 95 per cent since a stark profit warning in June, with fears growing for the future of the company.
A statement from Barnet Homes said: “Barnet Homes is soon to go out to procurement for all of our future maintenance suppliers and we saw this as a good time to review our contract with Connaught.
“We would stress that the severance is happening on amicable terms.
“We would like to assure residents we are implementing transition plans as a matter of urgency, and we are seeking to minimise any disruption to our repairs service.
“We are looking at a number of eventualities with regards to our long-term repairs provision, and will continue to monitor Connaught’s position.”