Jarvis will continue to manage new and refurbished school buildings

The firm is set to sell its bidding arm, which tenders for school construction projects, to the Vinci group for an undisclosed price.

Jarvis will give up preferred-bidder status in four school projects, but it will manage the completed buildings.

Jarvis is restructuring its business after making a �255m loss last year.

Downsizing

Jarvis has been dogged by controversy since the 2002 Potters Bar rail crash - it was responsible for track maintenance on that part of the railway line - and has more recently suffered severe financial difficulties.

After amassing debts of �230m, Jarvis said in July that it would have to sell some businesses and reduce its operations to ensure its survival.

The company was bidding for things without having the depth of experience to pitch bids at the right level Geoff Allum, Investec

Under the deal announced on Wednesday, Jarvis is to give up exclusive negotiating rights for contracts to build schools in Norwich, Manchester, Northern Ireland and the Republic of Ireland.

Under PFI, businesses are awarded contracts to build and oversee facilities over a thirty-year period, with the public sector paying every year to use them.

JARVIS OPERATIONS Rail: the UK's largest maintenance contractor London Underground: partner in Tube Lines consortium maintaining three lines Councils: Street cleaning, recycling, traffic and other services Healthcare: Built sixty bed hospital in Berkshire Education: School and university accomodation services

Jarvis has no further tenders out to build schools and is unlikely to enter the market again.

However, it will continue to manage new and refurbished schools, which it says provides most of its PFI revenue.

Setbacks

The company has suffered a number of setbacks in PFI projects in recent months.

In August, it was stripped of a �174m school building contract by Fife Council while last month Kirklees Metropolitan Council decided not to proceed with a four-school project in which Jarvis was preferred bidder.

Geoff Allum, an analyst with Investec Securities, said Jarvis had struggled to finish projects on time.

"The company was expanding at a fast pace and was bidding for things without having the depth of experience to pitch bids at the right level.

"If you price a bid wrong and are stuck with it for a long time, you are liable to have cash flow problems."

Jarvis' problems worsened this summer when it breached certain banking agreements and said it would incur �141m in write-off costs relating to its university accomodation business.

The company's chief executive Kevin Hyde announced his resignation late last month.