Sadler’s Wells Theatre is considering legal action against Bovis Lend Lease. Bovis, before its acquisition by Lend Lease, managed a £52m refurbishment of the north London theatre two years ago. The scheme was plagued with difficulties and went £14m over budget. The theatre also had to close within months of its opening after a dispute about workmanship.

A spokesperson for the theatre confirmed it was considering litigation against some firms on the project, but denied a newspaper report that it was facing possible insolvency. She said: “The correspondence concerned [in the report] was taken out of context and arises from prospective litigation concerning some contractors and others. No public monies are being used in this prospective litigation but the Arts Council and Sadler’s Wells consider that the public interest requires that monies are recovered from those responsible for the overspend.”

The theatre is itself facing a writ for £2m from electrical contractor Goodmarriott & Hursthouse for alleged breach of contract. It is understood that the theatre has paid some of the claim but the contractor is still pursuing more than £1m.

The writ was issued last year after the contractor said Sadler’s Wells had breached an “acceleration agreement” in which it provided additional manpower on the project.

Bovis Lend Lease declined to comment.