Fit-out firm calls in Ernst & Young after series of setbacks including the £25m refurbishment of a Mayfair hotel.

Fit-out contractor Curzon Interiors went into administrative receivership this week, throwing the future of a series of key projects into doubt.

Building understands the company, which was part of the Jarvis group before a management buyout in 1999, called in receivers Ernst & Young on Tuesday afternoon.

Curzon Interior's holding company, CHL2000, fell into administrative receivership at the same time. In a statement Ernst & Young said: "The companies have unfortunately run out of working capital making it difficult for trade to continue."

Curzon was employed on a series of big framework deals, including the rollout of Jobcentre Plus schemes for the Department of Work and Pensions.

It is understood to have suffered a series of setbacks on its projects, particularly the £25m refurbishment of the Intercontinental hotel in Mayfair. One source at a rival fit-out company said: "The contract was too ambitious, so a lot of fit-out firms walked away from it. Curzon has struggled immeasurably with the work."

The fit-out sector looked to have stabilised since the high-profile collapses of Benson and Spectrum Projects in 2004. Curzon overturned a loss of £1.5m in 2003 to record a pre-tax profit of £650,000 for the year to 31 July 2004. Sources now say that other companies involved in smaller scale fit-out could be struggling as well.

Although Curzon technically can continue trading while in receivership, sources close to the DWP framework said its involvement in the contract was likely to end as a result of the development. The deal has so far been worth £41m to the company. One source said: "We will be in touch with Curzon, but from our point of view this is a contractual breach."

The Intercontinental project, due for completion by this summer, involves the refurbishment of 449 guest rooms and suites, undertaken over a 90-week period.