Kier, a builder of homes, schools and hospitals said it is laying off 60% of the 625 workers in its residential construction business as it sees no let-up in the housing recession for the next 18 months.

As a result it will close four out of five offices. About 100 jobs have already gone, with 250 to be axed.

The group said its order book of exchanged contracts at June 30 was 45% down on last year, while home completions for the year were down almost 19% to 1,438 homes.

Earlier this month the UK's major housebuilders, including Taylor Wimpey and Barratt Developments announced about 5,000 job losses because of falling activity levels.