Nine men of Indian origin working on the £200m Stephenson Quarter development were arrested. Six had overstayed their visas, two had entered the UK illegally and one was a failed asylum seeker.
According to local news reports, all were working for subcontractor Heyrod on concreting work.
There was an early morning swoop at 6.30am last Wednesday after the immigration service received a tip-off.
A spokesman for main contractor Miller Construction told the Newcastle Journal: “The site was visited by officers from the Home Office who were making enquiries into a company operating as a subcontractor on the project.
“We fully supported the officers during their visit. Miller Construction requires all of its subcontractors to comply with UK legislation regarding eligibility to work of their employees.”
A spokesman for developer Clouston Group said: “We are shocked and disappointed to hear of the suspected employment of illegal workers by a sub-contractor on this strategic development project.
“We refuse to speculate further but, as the developer, we and our main contractor Miller Construction are committed to using local people and developing local skills wherever possible on this important project.
“We are supporting Miller to remind the supply chain and all sub-contractors on site about the conditions they are meant to work to. Aside from national legal obligations, terms and conditions are quite explicit in all contracts with suppliers.
“All subcontractors coming on site must sign to confirm that they have appropriate procedures in place to cover health and safety, employment and other legal requirements.”