Further signs of pressure on private equity firms have been revealed by City insiders.

Speculation about the stability of some of the deals, which include key suppliers to the public sector, has continued with the news that funders putting together deals to finance buy-outs are struggling to find partners prepared to share the risk.

Key figures in the City say the market, which is currently under investigation by MPs, has reached its peak.

Rising interest rates have become a critical factor and there is concern, particularly in Whitehall, that many of the deals could collapse.

Big lenders, including Credit Suisse and Morgan Stanley, which have bankrolled the wave of billion-pound deals, have now closed their books to new business. The UK has been by far the biggest private-equity market by deal value, accounting for four of the top five deals in the last three months.

Among them was the buy-out of BUPA hospitals.

Marek Gumienny, managing director of the Candover fund, predicted companies involved in private equity would take some financial pain. ‘A healthy correction is inevitable ,' he said.