The outcome of the tunnelling case has dealt Balfour Beatty's reputation a severe blow.

Civil engineering sources said the contractor was likely to face tough scrutiny when trying to prequalify for future tunnelling work.

Balfour Beatty refused to say whether it was considering an appeal. A company statement said: "The collapse of the tunnel did not result in injury to individuals working on the site or to anyone else. The safety of its employees and the general public is of the highest priority to Balfour Beatty. The company deeply regrets the tunnel collapse and its consequences."

Health and Safety Executive chief inspector Sandra Caldwell said: "The level of the fines sends a clear message to all in the industry, including clients, designers, consultants, contractors and subcontractors that they must ensure the safety of the public and workers."

The severity of the fine took the engineering world by surprise. It is the largest single fine ever imposed for a health and safety breach.

The combined fine on Balfour Beatty and Geoconsult matches the £1.7m penalty imposed on four firms after the Ramsgate ferry walkway disaster in 1994, when six people were killed.

Construction union UCATT general secretary George Brumwell welcomed the tough penalty. He said: "The HSE and the courts will no longer tolerate practices that place the public and workers' lives at risk."

John Anderson, an independent consulting engineer, said the fine was unprecedented: "The collapse was a landmark in terms of a civil engineering disaster and in terms of a tunnelling collapse. The level of fine is also a landmark."

Anderson added that the decision had important implications. He said: "It is significant in that the judge ruled that Balfour Beatty was more culpable than the designers. At the same time, it is clear that designers do have a duty of care in terms of health and safety."