The chief executive of local government contractor Mouchel has claimed the company is a ‘stable business again', after an 11th-hour deal to save it.

Mouchel had pledged to rearrange its finances by 31 July and, just hours before the deadline passed, the firm agreed to sell a majority stake to RBS, Lloyds Banking Group and Barclays in return for the banks' agreeing to write off £87m in debt.