There will be no more bonus payments or severance payments to company directors of Carillion, a British government agency said Wednesday as it tries to deal with the fallout of the firm's collapse.

Payments were stopped after the construction-to-catering firm went bust on Monday, the government's Insolvency Service said.

"Any bonus payment to directors, beyond the liquidation date, have been stopped and this includes the severance payments which were being paid to some senior executives who left the company," a spokesman for the agency said.

The announcement followed a heated exchange in parliament over Carillion's collapse, as Prime Minister Theresa May sought to defend the government's decision to sign major deals with the company after it issued the first of several profit warnings last July.

"We're making sure in this case that public services continue to be provided, that workers in those public services are supported and taxpayers are protected," May told lawmakers.

Carillion has public sector and private partnership contracts worth £1.7 billion ($2.35 billion, 1.9 billion euros), including cleaning and catering at public hospitals, various construction works and maintaining 50,000 army base homes for the Ministry of Defence.

The government has said the company's 19,500 staff in public sector jobs will continue to be paid, at a potential cost to the taxpayer of hundreds of millions of pounds.

In the private sector 90 percent of the company's clients have said they will continue to honour Carillion contracts in the interim. But work has paused on construction sites, the Insolvency Service said.

Opposition Labour leader Jeremy Corbyn said the "costly racket" of having private firms run public services should end.

"These corporations need to be shown the door," he said in parliament.

"We need our public services provided by public employees with a public service ethos and a strong public oversight."

After months of talks the government denied Carillion's formal request for help, first made on December 31.

Interim chief executive Keith Cochrane said the company was struggling under £900 million of debt and a £587 million pension deficit when it went bust, with just £29 million in cash.

Source: AFP