North Midland Construction, which is based on Nunn Close, is among 112 firms across the country who have been accused of bid-rigging activities when applying for tenders in the public and private sector for projects including schools and hospitals.

It is alleged companies have been involved in a practice known as cover-pricing, where some of the firms involved in bidding for public sector contracts agree to put in tenders likely to be too high to win.

But in a statement released this week, the firm told Chad: "The company has been helping the OFT with its enquiries and will be defending the allegations made against it.

"Of the six initial allegations, three have been dropped and three remain, two applicable to North Midland Building Limited and one to the civil engineering division."

The investigation was sparked by a specific complaint in the East Midlands in 2004, but officers found the problem of 'cover-pricing' was widespread.