The funding – which will be delivered through partners of the British Business Bank via its Enterprise Finance Guarantee (EFG) programme – was welcomed by business secretary Greg Clark.

The funds will be made available to SMEs – such as the chain of subcontractors to Carillion – which may not have the security required to enable them to lend from high street banks.

“We want to signal very clearly to small- and medium-sized businesses – who were owed money by Carillion – that they will be supported to continue trading,” said Mr Clark.

“The banks have responded to my request by agreeing to support businesses and individuals affected.

“This further guarantee will help those businesses who may not be able to provide the usual security for a loan.

“I will continue to work closely with business organisations, trade unions and banks to actively support those affected by Carillion's insolvency.”

Keith Morgan, CEO at the British Business Bank (pictured above), added: “The EFG [programme] is an important option for smaller businesses who need access to finance, but may not be able to meet a provider's normal security requirements.

“To help in these exceptional circumstances, we have designed additional flexibility into EFG that could be particularly suitable for firms in the Carillion supply chain.

“We would encourage lenders to work with their customers to use these new flexibilities to meet their needs.”