Cheshire County Council is to cancel a £210m road maintenance contract with troubled engineering group Jarvis.
The decision adds to the woes of the firm which revealed a pre-tax loss of £246.7m last week for the year ending 31 March.
Jarvis has maintained Cheshire's roads for seven years and the council had been set to award it for seven more.
But it has reversed the decision after studying the company's finances and public image.
The county council's executive recommended on 2 July that Jarvis plc should get the contract but found that, "on the same date financial and other information relating to Jarivs plc came to light which had a marked effect on the company's share price."
Councillors subjected Jarvis to further scrutiny and decided on Thursday to award the contract to another company.