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

The only year with more activity was 2002, when £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 £4.3bn of deals were signed, and well up on the £5.2bn signed in 2004.

The biggest area of PFI spending was accommodation, with a total spend of £2.8bn. This was followed by health with £2.5bn and education with £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 £5.2bn, compared with £6.3bn in 2005. Italy had the highest value of PPP deals with £2.3bn, followed by Austria with £571m and Ireland with £418m.