Laing is to retain liability for the refurbishment of the the Great Eastern Hotel after the sale of its construction arm to O'Rourke.
The prestigious City scheme, completed last year, came in over budget, according to project sources this week.

A Laing spokesperson said: "It is a completed job and we have retained liability for it." He went on to say that any disputes on the job had been resolved.

The news comes as Laing is engaged in eve-of-sale talks with its banks over the setting up new credit facilities after the offloading of its construction division.

The group said it would need longer-term borrowings after the deal, as it would be less cash-rich without its building arm.

Laing denied rumours that the bankers were getting jittery over the sale and that the negotiations had been affected by Laing's putting cash aside for it.

Banking sources have claimed that they had expressed concerns about Laing's liquidity after sale of the construction arm. Laing announced in July that it would leave £30m of its assets with O'Rourke on completion of the deal, which is due at the end of the month.

The Laing spokesman said the talks centred on the company's balance sheet once it had disposed of the construction division.

Banking sources have claimed that they had expressed concerns about Laing’s liquidity after sale of the construction arm

He said that the group would need more long-term borrowings when it becomes an infrastructure and housing group. Prior to the takeover, Laing was able call on cash flow generated by the construction division.

The spokesman explained: "We are changing from a cash-positive business to a cash-negative one. This means the company will be more highly geared."

He added that negotiations were covering contract bonds that will transfer from Laing to O'Rourke once the deal is struck, but added that this issue "seem to have been satisfied now".

The talks came as the group's shares dropped to a low point for the year, as the City continued to voice concern at the protracted disposal process.

One analyst said there was worry in the City ahead of Laing's interim results, due to be posted at the end of the month.