Social housing firm Connaught was placed into administration last night, raising fears over the jobs of its 10,000 staff.

In a statement, the firm's board said that it was "saddened" to announce it was appointing KPMG as administrators for the main company and its subsidiary, Connaught Partnerships Ltd.

The Exeter-based repair and maintenance specialist has been in turmoil since its summer warning that Government spending cuts could blow a £200 million hole in revenues over this year and next.

Plymouth Argyle chairman Sir Roy Gardner was brought in to chair the board in May and to attempt to put together a rescue plan with the help of several new directors.

Connaught has been in discussion with its lenders and other potential financiers since July in a bid to keep the company afloat.

But these initiatives "failed to reach a satisfactory conclusion in the time available", a statement from the board read.

Until their suspension yesterday, the company's shares had fallen by more than 90 per cent since June.

An estimated 700 Westcountry employees are among its 10,000-strong national workforce facing redundancy, despite the board's desperate measures to keep the business afloat.

Construction union UCATT called for an urgent rethink on how council services are delivered, adding that local authorities must step in now that Connaught's demise was being formalised.