The redundancies come despite the transfer of eight contracts to services company Mears, which KPMG say could save 600 jobs.

The administrators also said they were in “urgent negotiations” with Norwich council over two contracts including a notorious £17.5m deal agreed in December that was accused by rival bidders Morrison of being “abnormally low”.

As a result 300 staff on the Norwich social housing contract are currently in limbo over the future of their jobs. However, the second Norwich contract for waste, rubbish, recycling, street cleaning, grounds and tree maintenance will be carried out by Connaught Environmental, a division of the business that was not taken into administration.

The council said this morning it is “eleventh hour” negotiations over the social housing contract and the leader of the council Steve Morphew said KPMG’s “very tight timescale” made it harder to secure a new deal.

“On the housing side, we are doing everything we can and are exploring a number of options. But the very tight timescale that the administrator has set means there are no easy solutions,” Morphew said.

“We’re making real progress and this will help to further reassure residents - their bins will continue to get collected, streets will keep being cleaned, grass will be cut and emergency housing repairs will be completed.

“This deal would do a number of things - secure over 200 jobs, benefit a local contractor and put us on the right path to continue our discussions with the administrator,” he said.