Laing O'Rourke is set to restructure its business in the next financial year.

Chief executive Ray O'Rourke is understood to be planning to split the firm into northern and southern elements, and to promote Mike Robins, the head of construction at Heathrow Terminal 5, to group construction director.

O'Rourke is also understood to be planning separate units for infrastructure work and new projects, and may set up a division for specialist arms such as M&E contractor Crown House.

The restructuring, which is due to come into effect from 1 April, follows the departure of former southern head Steve Hollingshead and the death of northern boss Mike Stoney.

A source at the firm confirmed the splitting of the business and said that staff had been told of the planned division. He added that Robins would be promoted to a more exalted role.

The source said: "I'm sure Ray's got a plan but at the moment we only know that the idea is to create northern and southern divisions. At the moment it's essentially the North, the Midlands and London and the South-east, so it'll mean going from three to two."

It is not known how what is currently the Midlands section will be split between the two divisions.

One client said the new structure was being put in place to provide more clarity in the organisation.

The client said: "Obviously T5 is beginning to wind down and Ray's just looking to get a clear structure in place, which makes sense."

T5 is beginning to wind down and Ray’s just looking to get a clear structure in place

Laing O’Rourke client

Building reported in October that Laing O'Rourke suffered a 56% dip in pre-tax profit to £26.4m for the year ending March 2005, compared with £60.8m in 2004. As a result of the dip, staff bonus payments were frozen.

Meanwhile, Laing O'Rourke has decided to stick to its latest bonus offer for civil engineering workers at T5, despite a four-day strike last week.

Building understands that the firm has upheld its offer of a 67p-an-hour bonus. The offer has been recommended by unions despite falling short of workers' original demand for £1.

It is understood that T5 client BAA has told Laing O'Rourke it will not countenance further claims on the project, which it is financing on a cost-plus basis.

Electrical workers on the Wembley stadium project were last week understood to have been paid £27 an hour to complete crucial electrical work over the weekend.

n Contractors Bovis, Multiplex and Sir Robert McAlpine have emerged as the leading contenders for the Shard of Glass tower at London Bridge.

It is understood that the three firms are out in front in the race for the main construction contract on the £350m building.