The outsourcing giant Interserve failed to persuade shareholders to approve a rescue plan for the company.
It is expected that Interserve will enter into administration later today, although its contracts are likely to continue as usual and no job cuts are expected.
But its collapse could provoke further debate on the use of private sector contracts for public services.
Interserve has 45,000 employees in the UK and 65,000 worldwide, cleaning schools and managing catering and construction projects.
Shareholders voted 59.38% against the plan, which would have seen their participation reduced to only 5%, with lenders delivering the lion's share of the business.
Interserve said: "The company's board of directors is convening an urgent council meeting to evaluate its options". However, the company added that "in the absence of viable alternatives" it is likely to apply formally to enter into administration.
EY accountants have been deployed as administrators. They will then sell the company for a nominal amount to the current lenders (a mixture of banks and bondholders) who will hold 100% of the new company.
The shares of Interserve will be suspended immediately on the London stock market, the company said.
The debt accumulated after the construction project delays and a failed waste energy project in Derby and Glasgow continues.
So it's Interserve?
The outsourcing company is one of the largest public service providers in the UK. The company has started to dredge and build, and from there it has diversified into a wide range of services, such as healthcare and catering, for clients in the government and industry.
It sells services, including probation, cleaning and health care and is involved in construction projects.
Interserve is the largest provider of probation services in England and Wales, overseeing around 40,000 "low-medium risk criminals" for the Ministry of Justice.
Its infrastructure projects include the improvement of the M6's Junction 6 near Worcester, the renovation of the Rotherham Interchange bus station in Yorkshire and the upgrading of sewerage and water pipes for Northumbrian Water.
Hospital contracts include a £ 35 million contract at the King George Hospital in east London for cleaning, security, meals, waste management and maintenance.