Utilities group AWG says it is close to resolving the last problem contract it was left with after its acquisition of contractor Morrison Construction last year.
The group said it had resolved five contracts since the summer and had one to go. Earlier this year, AWG slashed 拢22.9m off Morrison's value after discovering that the contracts it had taken over would not be worth as much as first thought.

AWG bought Morrison for 拢265m in August last year.

A spokesperson said: "We are working through the problems and it is not as bad as we first thought. We can see an end to the process."

The problems surrounding Morrison have led to fresh speculation this week that AWG will sue brothers Gordon and Sir Fraser Morrison for 拢30m. The spokesperson refused to comment, saying the group was "under strict legal instructions" not to do so.

Morrisons' turnover for the six months to 30 September was 拢415m and operating profit was 拢7m. AWG announced in May that Morrison had made an operating loss of 拢33.8m in the same period last year.

AWG said work taken on after the acquisition was profitable and provided a sound base for the future. The group said Morrison Construction was now concentrating on longer-term framework and PFI deals.

AWG has restructured its businesses, dividing them into two halves. The first will include all of its water interests and the second will group together its utilities, construction, rail and PFI divisions.