The union delegation, which met ministers last month, said that if the government used its economic muscle in this way – it spends £20bn a year on construction – safety standards would improve.
The proposal will be included in the unions' action plan for improving health and safety, to be presented at a safety summit next month. The meeting will be attended by deputy prime minister John Prescott and about 500 delegates.
George Brumwell, UCATT general-secretary and Health and Safety Commission member, said government departments should set an example by policing compliance with health and safety legislation.
He also said the government should stipulate minimum standards of health and safety awareness in its contracts. These should include the requirement that a workforce have an adequate site safety induction and proper protective clothing. Firms should also be required to have a safety representative from the workforce on site.
Companies would have to demonstrate how they are complying with these minimum standards at every stage of the contract process from inclusion on approved lists to contract award.
Brumwell said: "When firms do not comply they should be struck off the future worklists. The prospect of that would exercise many construction boardrooms."
Allan Black, GMB national construction officer, said this would be an incentive for firms to step up their safety awareness. He said: "You either grab their balls or you grab their wallet. This would be grabbing their wallet as you are not going to put firms in jail over site deaths."
T&G construction secretary Bob Blackman called for health and safety training to be updated at all stages of construction.
The Construction Confederation agreed with the need for compliance with legislation and for minimum standards but said removing firms after one prosecution under health and safety legislation would be too draconian.
A spokesperson said: "We should all be working together to improve compliance. If it is a case of 'one strike and you're out' then we think that would be too stringent."
The ministerial meeting last month was attended by Blackman, Black and Brumwell. Government representatives included construction minister Nick Raynsford, environment minister Michael Meacher and junior minister Beverley Hughes.
