Firms are paying their subcontractors three weeks late, compared with an average of two weeks a year ago.

As well as paying later than the agreed date, research from credit rating agency Experian shows that, on top of the three-week delay, subcontractors’ payment terms have stretched from 30 days to 60 or 90.

Tony Pullen, the managing director of Experian’s business information division, said: “Businesses are not only taking longer to settle bills after the agreed date, but they are also extending those dates. The problem for smaller suppliers is made worse because they are often under pressure to settle their own bills quickly.”

The news will come as a disappointment to industry figures who have been campaigning to improve payment practices in the sector.

Suzannah Nichol, chief executive of the National Specialist Contractors Council, said: “It’s incredibly frustrating. How do they think those down the supply chain can manage an extra 21 days, particularly in these times of the credit crunch? It just proves what we have been saying for some time. It is unacceptable.”

We risk going back to the early nineties when firms were going bust all over

Rudi Klein

Rudi Klein, chief executive of the Specialist Engineering Contractors Group, said such delays could make small firms insolvent.

He said: “We’re concerned this could tip them over the edge. If that happens, as is likely, we have the risk of going back to the early nineties, when firms were going bust all over the place.”

Construction fared better than some other sectors in the Experian report. The energy industry had the worst record, with an average delay of 37 days.