The firm, which has offices in Dundee and Aberdeen, confirmed it has appointed Campbell Dallas as administrators and that its 280 strong workforce had been sent home on gardening leave.

Muirfield Contracts undertakes a wide variety of building and construction work for public, private and individual clients. Recent projects include Angus Council’s headquarters, refurbishment of Dundee’s McManus Galleries, and renovation of the Meadowside headquarters of publishing firm DC Thomson.

The company also engages approximately 110 labour-only sub-contractors, had a turnover of £47 million and was latterly engaged on approximately 20 contracts, mainly in the Dundee and Aberdeen areas.

Muirfield Contracts was founded in 1988 and in 2013 was sold to Azure Investments, a private equity business.

A Muirfield statement said: “Joint administrators, Derek Forsyth and David Hunter, Partners with Campbell Dallas, will now explore all options for the company.”

Administrator Derek Forsyth said: “Muirfield Contracts is a household name in Scotland’s construction sector with an excellent reputation for the quality of its client base and projects.

“Although the company has a large turnover, it had been suffering from unsustainable cash flow problems and despite best efforts to raise additional funding administration was the only option.

“It is likely that a significant number of employees will be made redundant in the early stages of the administration and they will be advised as soon as possible.

“We recognise that this is a very difficult time for all concerned and will do our utmost to provide as much support as we can.”

Harry Frew, Regional Secretary for UCATT Scotland, said: “Muirfield is a major employer in the region especially in Dundee, if the company cannot be rescued it will be a bitter blow and create a major hole in the local economy.”

Construction union UCATT described the appointment of administrators as “a bitter blow to the local economy”.

The union said its officials will be seeking a meeting with the administrators to discover if the company can be rescued.

Harry Frew, regional secretary for UCATT Scotland, said: “Muirfield is a major employer in the region especially in Dundee, if the company cannot be rescued it will be a bitter blow and create a major hole in the local economy.”

UCATT said that, in the case of redundancies, it will ensure members receive full entitlement and a protective award “for the company’s failure to advise and consult them before making them redundant.”

Mr Frew added: “If there are job losses UCATT will do everything it can to ensure that members receive everything that they are entitled to while providing assistance in helping workers find alternative employment.”

First minister Nicola Sturgeon has pledged to support workers via the partnership action for continuing employment (PACE) team, after being asked about the situation by north east MSP Jenny Marra during First Minister’s Questions.

Ms Sturgeon said: “We have to do everything we can to protect local companies. Of course, there’s going to be a huge construction boost to the city of Dundee through the V&A. We should make sure we’re doing everything we can to support smaller businesses as we recover from the recession.”

George Ramsay, Tayside and Fife regional organiser for UCATT, confirmed that PACE representatives will meet with Muirfield workers at Dundee College’s Kingsway campus on March 17.

Dundee West MP Jim McGovern described the news as a “very sad development”.

He said: “I am extremely concerned that the workers of Muirfield Contracts have been placed on ‘gardening leave’.

“Coming less than three years after the closure of WH Brown, this news is a very sad development.

“It is of vital importance that we do all we can to try and save the jobs under threat. I will be looking to arrange a meeting as soon as possible with both UCATT regional organiser George Ramsay and any administrators to see what support I can offer.”