The fate of Carillion, one of Britain's largest construction companies, looks set to be decided at a crunch meeting with government figures at 10am on Sunday.
The meeting was brought forward as Downing St grappled with the implications of the potential collapse of the group, which has numerous public sector contracts in the UK and employs 43,000 people, 19,500 of them in Britain.
Carillion's bankers have indicated that they will not provide the £300m of new funding it needs before February without direct intervention by the government.
But the expectation in Whitehall is that Number 10 will refuse to bow to Carillion's demands, making it increasingly likely that it could fall into administration as early as Monday.
The Wolverhampton-based construction and management group has been struggling to reverse its fortunes after racking up at least £900m in debts.
On Friday lenders to Carillion dismissed the company’s rescue plan and urged Downing Street to intervene.
With ministers determined not to provide a direct financial rescue package, the company's directors are seeking guarantees on payments on state contracts to try to reassure lenders to the heavily indebted group.
There are further concerns about the the £580m deficit at the company's pension scheme.
Government figures said officials were acutely conscious that the "clock is ticking" before the markets open on Monday morning.
Carillion's market capitalisation has shrivelled from £2bn to just £61m after several profit warnings, the first of which — on July 10 — revealed an £845m impairment charge on the construction division.
Whitehall's focus has been to work with the companies in joint ventures with Carillion to see if they can take on the contracts. Others could be taken in-house.
John Manzoni, a former BP executive who is permanent secretary at the Cabinet Office, is the lead official working on this - alongside David Lidington, the newly appointed Cabinet Office secretary.
Haydn Mursell, chief executive of Kier Group, which has joint ventures with Carillon on both the new HS2 railway line and the “smart motorways” programme for Highways England, said it had “contingency plans in place to ensure the projects remain on course”.
“On HS2 specifically there are a number of options including the TUPE transfer of employees to another operator including Kier/Eiffage as well as other contractors who are interested in joining the project,” he said.
Government insiders insisted they had been "tracking developments at Carillion for weeks" and that contingency planning had been underway for some time under Damian Green, Mr Lidington's predecessor.
Vince Cable, Liberal Democrat leader, said Carillion’s shareholders and creditors should take the biggest hit if the government was forced to step in to rescue it.
Sir Vince said it would not be acceptable for the taxpayer to bailout the company, drawing parallels with the 2008 rescue of the banks where “profits were privatised and the government nationalised the losses”.
The Lib Dem leader’s intervention on Saturday suggests the crisis at Carillion is about to become highly political; Sir Vince claimed last November that the government was “feeding” contracts to the company to try to keep it alive.
Ministers will face fierce political criticism if they have to bailout a company which continued to receive major public contracts — including on the HS2 high speed rail line — after it issued a profit warning last July.
The government would also have to comply with EU state aid rules, but Sir Vince said that in the first instance the private sector should take a hit.
“The shareholders of the company are going to have to take a loss,” he told the BBC. “The creditors, the big banks who hold most of this debt, will have to write off some of it, perhaps replace some of it with shares.”
Carillion’ latest effort to reverse its fortunes, a business plan presented on Wednesday to its banks was rebuffed as “too optimistic”, according to people involved in the negotiations. The banks are being co-ordinated by Barclays, Santander, Lloyds Banking Group, Royal Bank of Scotland and HSBC.
The government’s role is complicated by its reliance on the contractor for a wide range of services: the maintenance of military bases; school meal provision; work on some of the UK’s highest-profile public works projects, including the HS2 high-speed rail line.