After months of fighting to save the company, chief executive and founder Stuart Wright conceded defeat last week, and asked the courts to appoint Ernst & Young as its administrator.

The award-winning firm had been badly hit by the slump in the property market and was reportedly haemorrhaging money since last year.

Earlier last week the firm had attempted to stave off administration by placing some assets in administration. But that wasn't enough.

The move has left a question mark over the Arundel Gate scheme – heralded the most prestigious residential development Sheffield has yet seen.

The project is underwritten, which should see it through to completion, and Ernst & Young said the division of City Lofts dealing with St Paul's Tower has been left out of the administration arrangements.

Ernst & Young said: "The group's current individual developments under construction should be able to continue unaffected so that value is maintained in the wider group."

The administrator said subsidiary companies set up to manage the Sheffield development "are continuing to trade with the intention that their respective developments should continue".

City analysts expect the Sheffield scheme will be sold on to raise cash for creditors.

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