BALFOUR Beatty could be broken up in a £1bn bid for some of its prized contracts.

John Laing Infrastructure Fund has made an offer for Balfour's portfolio of public private partnership (PPP) contracts.

Those include long-term agreements to run public projects, such as schools and hospitals.

The approach comes as Balfour continues to struggle, with its UK construction and engineering services operation hit by the impact of design changes, project delays and contractual disputes.

The firm, which has offices in Newcastle, has issued three profits warnings this year.

Balfour's PPP portfolio includes 13 road projects, five hospitals and eight schools.

The remainder of Balfour's business, outside its PPP work, includes construction projects in the UK and US, and rail maintenance in the UK, Germany and Austria.

The company previously revealed it had secured a £44m deal to design and build the A1 Coal House to Metro Centre scheme, in Gateshead.

The project will introduce three lanes in both directions on a four-mile stretch from the Metro Centre to Coal House junction and new links between the Lobley Hill and Gateshead Quay junctions.

Bosses said the work, which will support about 200 jobs, is expected to be finished in early 2016.

Balfour previously helped build the £269m London Olympic Games swimming centre and a Heathrow Airport passenger terminal.

Earlier this year, £3bn merger talks between Balfour and rival Carillion collapsed when Balfour's board refused to ditch plans to sell a US unit as Carillion had wanted.