The withdrawal of the contracts follows talks between Unite general secretary, Len McCluskey and Balfour Beatty’s chief executive officer Mike Peasland.

Unite says the negotiations will be followed by further high level talks to secure members’ livelihoods and the stability of the industry.

It comes after Balfour Beatty lost a High Court action yesterday seeking an injunction to prevent strike action at the company.

Unite is calling on the other six firms to follow the lead of the main player Balfour Beatty and withdraw the contracts and the threat of dismissal.

Welcoming the news, Len McCluskey, general secretary of Unite, said: “Balfour Beatty’s decision to withdraw these contracts, the threat of dismissal and to enter high level talks is a welcome move. Not only is it a victory for common sense, but it is testament to the resolve of hard working construction workers who have stood shoulder to shoulder to defend their livelihoods.

“Continuing to impose these contracts would have resulted in a race to the bottom that would have been bad for the industry. We expect the other six construction firms to see sense and follow Balfour Beatty’s lead in talking seriously about securing livelihoods and bringing stability to the industry.”

In a message to supporters, one of the leading rank and file organisers of workplace protests against the contracts, Steve Kelly of the London Construction Branch, said: “You are all working class heroes. Well done to one and all.”