The backer said: “The deal is unacceptable. We are not prepared to take all the risk, then have to pay back the gains to the government. The draft has gone back to the government.”
Whitehall has been pressing for a refinancing deal to be struck on early PFIs after criticism levelled by the National Audit Office on gains made by the private sector on the Fazakerley prison in Liverpool.
Peter Gershon, chief executive at the Office of Government Commerce, was confirmed as a member of the new reform and delivery team on Monday.