Social housing giant Connaught called in the administrators on Tuesday night after failing to resolve its financing issues with its lenders.

The FTSE 250 group whose shares were suspended on Tuesday, said it was appointing KPMG as administrators for the main company and its subsidiary Connaught Partnerships.

However, its other subsidiaries - including Connaught Compliance, National Britannia Holdings, Fountains Limited and Connaught Environment Limited - are not being placed into administration and will continue to trade normally.

The group, which employs 10,000 people and has around 180 outstanding maintenance contracts, is now expected to be split up and sold off following the biggest company bankruptcy since Woolworths failed in 2008.

Connaught has been struggling to cope with its debts since June, when it warned that it would lose £80 million from its income this year.

Around 31 of its contracts with local authorities were under threat after austerity measures announced in the government's emergency Budget.

It has been in discussions with its lenders since the end of July over its £220 million of debt which is provided by six banks and four other creditors.

However, the group said last night that these 'failed to reach a satisfactory conclusion in the time available'.

'Following extensive discussions with the group's secured lenders, it is now clear that sufficient support would not be extended to the group as a whole to enable it to continue trading as a going concern,' it added.

Shares in the Exeter-based company have lost about 90 per cent of their value since late June.

Andy Brown, analyst at Panmure Gordon, said other groups could benefit from Connaught's demise.

'On the social housing contracts, this could provide opportunity for the likes of Mears, Kier, Morgan Sindall, Mitie and Rok.'