Pressure is mounting on support services group Serco after rivals distanced themselves from its “brutal” handling of suppliers on public sector projects.

The company has been ordered to explain itself by the Cabinet Office after pledging not to squeeze suppliers to deliver some of the £800m of savings the Government is demanding from the industry.

Despite the assurance, Serco – which runs prisons, nuclear facilities and ports for the Coalition – has demanded a blanket 2.5pc cash rebate from suppliers and threatened them with the loss of future contracts.

Capita, G4S, Carillion and Compass Group yesterday all sought to reassure their suppliers that they had no plans to make similar demands, leaving Serco isolated.

The Coalition is seeking at least £800m of savings from contracts with 19 leading Government outsourcers, including Serco, Capita and G4S, in 2010.

Serco’s chief executive, Chris Hyman, had agreed with Cabinet Office minister Francis Maude, who is leading the Government’s efficiency drive, that the savings it presented would not come from suppliers’ payments.

However, a letter sent by Serco finance director Andrew, made clear that the company’s call for cash was directly related to the Government’s demand for contract savings this year.