Construction companies were on Monday braced to expect fines running into hundreds of million pounds for alleged bid-rigging activity. The case will prove the first big test of how the competition watchdog deals with struggling companies in the recession.

Competition experts expect the Office of Fair Trading to penalise companies with fines of between 1 and 2 per cent of group turnover at the close of its five-year investigation into cover pricing. This would be greater than the operating profit margins of most construction companies.