Construction group ISG, which was in the middle of numerous government projects including work to prisons, has collapsed into administration in the UK.

The majority of its 2,400 employees have been made redundant after the UK business appointed joint administrators at EY, and shut down its sites immediately.

The construction services company had been trying to find a buyer but failed to secure a suitable rescue deal, EY said.

A potential buyer “could not, despite repeated requests of them to do so, adequately demonstrate that they had the funding needed to recapitalise the business and keep it solvent”, it added.

“Due to current market conditions, an alternative sale or additional funding could not be secured.”

The London-based business employs about 2,400 people across its UK business, the majority of whom will be made redundant with immediate effect.

Around 200 employees will initially be kept on to assist the administrators in winding down the business.

ISG is involved in 69 central government projects totalling more than £1 billion, data analysts Barbour ABI said.

This incorporates 22 projects for the Ministry of Justice, including a £300 million extension to the Grendon and Springhill prisons in Buckinghamshire, and £155 million worth of work to expand three prisons in other locations, the data showed.

ISG has worked on other large projects including building and refurbishments of prisons, police and fire stations, schools and offices.

Barbour ABI’s chief analyst Ed Griffiths said the live projects were “just the tip of the iceberg” when it comes to ISG’s portfolio of contracts, adding: “The ripple effect will be extremely worrying for the hundreds of subcontractors involved.”

A spokesperson for the Government said: “We have implemented our detailed contingency plans and affected departments are working to ensure sites are safe and secure.”

ISG is an international company also operating across Europe and the Middle East.

Eight trading entities under the UK business, including its engineering and retail arms, have all been placed in administration.