Fifty-five PFI contracts worth a total of 拢8.6bn were signed last year, making it the busiest for four years.

The only year with more activity was 2002, when 拢18.2bn in contracts for London Underground were signed, according to research from International Financial Services London.

The 2006 total is double the figure for 2005, when 拢4.3bn of deals were signed, and well up on the 拢5.2bn signed in 2004.

The biggest area of PFI spending was accommodation, with a total spend of 拢2.8bn. This was followed by health with 拢2.5bn and education with 拢2.3bn.

The value of the European PPP market fell last year after a long period of expansion.

In 2006 PPP deals in Europe were valued at 拢5.2bn, compared with 拢6.3bn in 2005. Italy had the highest value of PPP deals with 拢2.3bn, followed by Austria with 拢571m and Ireland with 拢418m.