The Government must take into account the size and security of the firms it deals with in the wake of the Carillion crisis, a county business leader says .

The building giant has gone into compulsory liquidation after failing to secure short term financial support.

It has been struggling under £900 million of debt and a £590 million pension deficit, and made a string of profit warnings.

Despite the warnings, the Government continued to award it contracts.

A last-ditch plea from Carillion to the Government to provide it with a £20 million lifeline fell on deaf ears over the weekend, triggering the compulsory liquidation.

Carillion has public sector or public/private partnership contracts worth £1.7 billion, including providing school dinners, cleaning and catering at NHS hospitals, construction work on rail projects such as HS2 and maintaining 50,000 army base homes for the Ministry of Defence.

In Cumbria, it is part of the award-winning ACKtiv Nuclear consortium which, as part of an integrated project team with Sellafield, is supporting the decommissioning of the First Generation Magnox Storage Pond at through its Bulk Sludge and Fuel Retrievals project.

Carillion has an office at Westlakes Science Park, near Whitehaven.

Sellafield Ltd said it had been monitoring the situation for "some time" and Carillion's work would be absorbed with no financial or operational implications for Sellafield Ltd.

Ivan Baldwin, chairman of Britain’s Energy Coast Business Cluster and vice president, Government and International for NNL, said: " Something like this sends a shudder through the construction sector and other business areas too.

"I know we have member companies and their employees who are directly involved, not only at Carillion but as suppliers to their projects.

"Let’s hope that there is clarity and security for those people and businesses as soon as possible given the important work that they’re doing – and that smaller suppliers are treated fairly in any distribution of contracts and funds .

"As a business cluster, we hope that any developments of government procurement processes will consult widely and involve businesses to ensure that future tenders are awarded with considerations of security and sustainability throughout the supply chain as a priority."

Elsewhere, Carillion appears to have little if any involvement in contracts across Cumbria’s public services.

Theresa May's cabinet is due to meet this afternoon to discuss the crisis as fears about workers' redundancies and pensions mount.

Meanwhile, the Pensions and Lifetime Savings Association has warned consumers that they should be careful of companies who seek to capitalise on this issue by encouraging people to transfer out of defined benefit (DB) pension schemes without due consideration.

Joe Dabrowski, head of governance and investment at the PLSA, said: "One in six pension holders in the UK have been contacted by a company – other than their provider – to discuss making changes or transferring their pension.

"Following the collapse of Carillion, we have already seen warning signs that scammers may be seeking to exploit DB scheme members’ fears about their future.

“We call upon regulators to act urgently to ensure that members are protected, and to take the strongest possible action against unscrupulous companies looking to take advantage of savers."

Carillion subcontractors and other small firms which might be at risk are being urged to seek professional advice at an early stage to help safeguard their future.

Paul Barber, North West chairman of the insolvency and restructuring trade body R3, says firms which are owed money need to assess what impact it will have on their business and clearly understand their options.

Subcontractors and suppliers are usually classed as unsecured creditors, and come behind secured creditors, such as banks, and employees in the queue for payment.

Firms are being told to contact the liquidator for information on their specific case.

Mr Barber, who is also a partner at Begbies Traynor, says firms could be affected in a number of ways.

He said: “For subcontractors awaiting payment for work carried out, there will be an immediate impact on cashflow.

"They will of course still be expected to pay any outstanding labour or materials costs for the work they have incurred or purchased and make VAT payments due to the crown authorities which may in some cases include their invoices to Carillion.

"But also in the period ahead there will also be an impact on their balance sheet.

"Bad debts and work in progress may have to be written down, weakening the balance sheet strength. If not risking insolvency, in practical terms it could affect their credit rating, making it harder for them to raise finance, or their ability to win future work since in many formal tendering processes, the balance sheet is used as a part measure of their stability.

“Many small subcontractors do not have cash reserves or assets to fall back on so will be in a vulnerable position.

"It is all the more galling as with this type of work it can be that the sub-contractor has carried a lot of the risk inherent in the main contract as often seen by way of low margins and extended payment terms of 90 days or more.

“Those which might be at risk should take professional advice as soon as possible and understand that the best option might be – for example, raising finance to overcome immediate cashflow problems, negotiating with their own creditors or even a formal insolvency procedure.”