Mouchel circled by hostile bidders

The group - which develops infrastructure for councils and Government agencies - said it had received recent approaches, but added it believes they do not "reflect the true value of the company".

Mouchel has been hit by a drop in demand after the change of Government in May as departments have reined in spending and postponed or scaled down projects.

Its shares have slumped to below 60p in recent weeks from a year high of 268p as investors have headed for the exit amid concerns over the impact of Government spending cuts and as Mouchel holds crucial talks over the refinancing of its debt pile.