(Reuters) - Britain's government will continue granting contracts to Interserve Plc IRV.L as the debt-laden outsourcing company battles to avoid a Carillion-style collapse, the Financial Times reported on Tuesday.

FILE PHOTO: Interserve offices are seen in Twyford, Britain January 17, 2018. REUTERS/Peter Nicholls/File Photo

Britain does not see Interserve as another Carillion CLLN.L, the construction and outsourcing company that collapsed in a mass of debt and pension dues in January, the FT reported, citing government sources.

Government tenders expected to be released early next year include a contract to provide housing for asylum seekers and another running a back-to-work program for the unemployed, the newspaper said.

A UK Cabinet Office spokesperson said a ban on one company bidding for government contracts would not be lawful.

“Public sector procurement rules require that bids are evaluated based on specific requirements and selection criteria,” the spokesperson said in an emailed statement.

“For any major contracts this includes a test to see whether the bidding company has the economic and financial standing to undertake the contract”.

Interserve had no immediate comment when contacted by Reuters.

Shares in Interserve lost more than half their value on Monday after the company announced a rescue plan that envisaged converting much of its debt into new shares, potentially handing control of the company to its creditors.

The Reading-based outsourcer, which employs 75,000 worldwide and has thousands of British government contracts to clean hospitals and serve school meals, said on Sunday it would seek to cut its debt to 1.5 times core earnings in talks with lenders that it hopes to complete early next year.

Interserve also announced on Monday it had been awarded a 25 million pound ($32 million) contract from Cwm Taf University Health Board as part of a 36-million-pound redevelopment of Prince Charles Hospital in Merthyr in Wales.