Crisis contractor Connaught has been axed from a £7m-a-year housing contract in the London Borough of Barnet.
The construction and maintenance outfit has been plagued by problems in recent months, and expects to make a loss for the full year.
In a further blow, Connaught has now a housing repairs and maintenance contract covering 15,000 council homes in Barnet.
The deal, which started in 2007, will now end in February 2011, 13 months early.
A statement from Barnet Homes said: “Barnet Homes is soon to go out to procurement for all of our future maintenance suppliers and we saw this as a good time to review our contract with Connaught.
“We would stress that the severance is happening on amicable terms.
“We would like to assure residents we are implementing transition plans as a matter of urgency, and we are seeking to minimise any disruption to our repairs service.
“We are looking at a number of eventualities with regards to our long-term repairs provision, and will continue to monitor Connaught’s position.”