Sir Vince Cable has lambasted the UK government over the collapse of Carillion and for not spotting the distinct warning signs that were visible to hedge fund investors 18 months before the demise of the construction company.

The Liberal Democrat leader has hit out at the Conservative government for ignoring what he calls "clear red flags" showing that the contractor, whose biggest customer was the UK government, was on the verge of bankruptcy. The 74-year-old questioned how these signals had become obvious to hedge...