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Enterprise has backtracked on a controversial insurance initiative that would have forced subcontractors to take out its public liability insurance or lose work.

In a letter received by subcontractors in March, the contractor said the cost of the joint cover would be factored into their rates. Subcontractors had feared this would make insurance cover more expensive than deals organised independently.

The letter went on to say: 鈥淚f you refuse to comply [鈥�] we will have no option but to advise your contract manager that you are no longer approved to operate as a contractor to Enterprise.鈥�

But in a subsequent press statement Enterprise said: 鈥淪ince the scheme鈥檚 inception [in 2007], where there has been a valid reason for not joining the scheme and a subcontractor鈥檚 own policy meets levels required, then we do allow subcontractors to continue operating under their own policy.鈥�

Rudi Klein, chief executive of the Specialist Engineering Contractors鈥� Group, said that he welcomed the apparent change in stance: 鈥淚t鈥檚 quite clear Enterprise has had to perform a u-turn. We are pleased that Enterprise has changed its stand.

鈥淚t鈥檚 important clients work closely with their supply chain to deliver value to clients rather than seeking to obtain commercial advantage.鈥�

A spokesperson for Enterprise denied there had been a u-turn and said subcontractors had always had the option to opt-out with valid reason.

Subcontractors have also criticised the firm for issuing inconsistent statements about how it planned to recoup the cost of the scheme.

In its initial letter Enterprise had stated the cost of its public liability cover 鈥渨ill be factored into your rates鈥�, but in its statement said: 鈥淲hen joining the scheme there is no adjustment to rates and there is no direct charge for the insurance policy, which is taken account of during commercial rate negotiations.鈥�