Consultant engineer Hyder has drawn up a list of 20 smaller rivals that it regards as potential acquisitions.
The firms, each of which employs 20 to 50 staff would cost between £1-10m. Hyder believes that the overhead costs of these firms could be cut by integrating them into its operations.

Tim Wade, chief executive of Hyder, said: "We want a group of people who can come into our existing offices. They are starting to come to us [to be bought] and forming an orderly queue."

About half of Hyder's targets are UK-based companies, at the high-value end of the market, such as those involved in traffic engineering modelling work.

Hyder expects to buy three or four of the companies on its list in the next year.

Wade added that Hyder is on course to make a profit out of its offices in China for the first time since opening them.