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The amendments, tabled by Labour peer Lord O鈥橬eill, president of the Specialist Engineering Contractors鈥� (SEC) Group, would allow subcontractors to demand a guarantee, after they have entered into a contract, of payment in the event that their employer becomes insolvent. If the employer fails to provide 鈥渁dequate security鈥�, through a bank bond or parent company guarantee, the subcontractor would be entitled to suspend the contract.

Rudi Klein, the SEC Group鈥檚 chief executive, said the changes were crucial in the current downturn. 鈥淪ubcontractors have always had to provide employers with protection,鈥� he said. 鈥淚t鈥檚 reasonable that they should also have a guarantee of payment.鈥�

He said the amendments were intended to 鈥渄eal with those who perpetually abuse the process鈥�.

However, the bid is likely to set specialists at loggerheads with main contractors. Graham Watts, chief executive of the Construction Industry Council, said he was disappointed the SEC Group had proposed the changes.

鈥淚t is a shame. If each body lobbies independently to suit their members, we will never make progress as a united industry.鈥� He said there was not a 鈥渃at鈥檚 chance鈥� the government would accept the changes.

Rupert Choat, a partner at law firm Cameron McKenna, said that having to obtain security would place an extra financial and administrative burden on employers. 鈥淭his doesn鈥檛 exclude subcontractors, as anyone who hires another specialist below them will be affected,鈥� he said.