The Association for Consultancy and Engineering (ACE) has called on government to support UK firms working in the UAE facing fee cuts.

The ACE has alleged that consultants operating in the UAE are going without payment or are being forced to accept fee cuts of up to 35%.

The global economic downturn and the “near financial collapse” of Dubai-based property developer Nakheel, has been blamed for the recent waves in the UAE construction sector.

Nelson Ogunshakin, ACE chief executive, said that clients were "taking advantage of the current economic situation" at the expense of consultants and other construction professionals.

He also claimed that the amount of unpaid fees was as high as £400m, double the industry projection, and that some agreed contracts were being dismissed and renegotiated.

Ogunshakin said: “We know that firms are being made to comply with an unfair negotiation strategy and that in many cases their contracts are effectively being torn up. Added to that, it seems that clients are asking firms to waive their right to legal action to recover fees – a situation which is unjust and cannot be allowed to continue."

The ACE has formally written to business secretary Lord Mandelson, UK Trade and Investment and the Department for Business, Enterprise and Regulatory Reform (BERR) to call for political action to address the situation.