Shares in Canadian engineering giant SNC-Lavalin fell to their lowest level in more than two years after the company revealed the federal government has decided it won't let the company settle allegations of foreign bribery out of court.

The company has had the legal cloud hanging over its head since 2015, stemming from allegations that some of its former employees paid bribes to officials in Libya to influence government decisions and win contracts prior to 2012.

The RCMP alleges that between 2001 and 2012, the company paid almost $48 million in bribes and defrauded various other entities of almost $130 million.

SNC-Lavalin had hoped to negotiate a remediation agreement to settle the matter, an outcome that would have seen the company pay fines and other forms of punishment in exchange for setting aside the legal charges.

But the government has apparently decided not to let the company do that, and the decision by the Public Prosecution Service of Canada — which handles prosecutions on behalf of the government — means that federal court case will proceed.

"The Criminal Code sets out the criteria for remediation agreements," PPSC spokesperson Nathalie Houle told CBC News. "The [director of public prosecutions] has determined that the criteria were not met."

For its part, SNC says it may appeal the decision.

"SNC-Lavalin strongly disagrees with the [government's] current position," the company said in a release, "and remains open and committed to negotiating such an agreement in the interest of its employees, partners, clients, investors, pensioners and other stakeholders, all innocent parties that have been affected during the last six years, and now face an unnecessary extended period of uncertainty."

The management and board of directors has seen extensive turnover since the events in question, and has subsequently set up a "world-class ethics & compliance framework," SNC said.

Shares in the company were halted shortly after the TSX opened on Wednesday, and when trading resumed about an hour later they immediately fell. Near midday, they were down by more than 14 per cent.