Oxfordshire CC has formally terminated its contract with Carillion following the collapse of the company, bringing forward the end of its contract by four months.

A payment of £10.65m has been made, covering work already completed by the liquidated company such as school meals, property services and building work.

The settlement will enable the council to officially end its contract from 1 February without the prospect of lengthy litigation.

Cllr Lorraine Lindsay-Gale, the council's cabinet member for property, cultural and community services, said: ‘We brought the process forward and legally terminated our contact and will be taking over those services to ensure continuity.

'Carillion's financial problems were not the original reason we wanted to end the contract, but, as the scale of the company's problems became apparent, we are very glad we ended the contract when we did.

‘The reality is that if we had not ended the contract and settled with the liquidators we would now be tied up in lengthy negotiations to end our involvement with the company.

'This early exit deal means we can get on with finding better ways to deliver services that Carillion provided.'