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Oxfordshire Council took the move after Carillion – which supplied meals to 90 schools in the area – went into liquidation.
The authority signed a 10-year contract with the contractor in 2012 for a range of services including property management and building new schools.
Meanwhile, Business Secretary Greg Clark wants a “fast-track” probe into the conduct of the directors as well as the company accounts.
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“The Tories have been drip-feeding more contracts to Carillion to buoy up an obviously failing company”
John McDonnell
He said: “Any evidence of misconduct will be taken very seriously.”
But Labour accused the Tories of also being responsible.
Shadow Chancellor John McDonnell claimed they were “drip-feeding more contracts to Carillion to buoy up an obviously failing company”.
GEOFFROBINSON
He added: “The Carillion collapse has raised real suspicions that the government was too close to this company and too wedded to its privatisation role.”
It has also emerged that Carillion executive Richard Howson is still being paid £660,000 despite quitting the role a year ago and that the company was awarded £1billion in new contracts after being handed a profit warning last year.