MULTIPLEX, the Australian construction giant that is building the new Wembley stadium, is to disband its UK construction arm, triggering the resignation of Martin Tidd, its head.

Staff at Multiplex’s Berkeley Square head office were told of the news yesterday.

The company said that the construction division would now act solely for Multiplex’s own development business and would not tender for any third- party work.

The move follows the sale of the £670 million construction contract for the White City shopping centre in West London to compatriot Westfield.

The construction division is now half the size it was three months ago.

Mr Tidd, managing director of the UK construction division, was paid a £338,000 sign-on benefit and retention payment last year, according to Multiplex’s 2005 annual report. It is thought that as part of the terms of his departure he will be able to keep the cash. It is unclear whether he will receive any additional compensation.

Further redundancies are expected from the construction division but Multiplex could not confirm numbers last night.

Multiplex will complete the construction of Wembley stadium and a Private Finance Initiative project in which it is involved in Peterborough. It is also expected to carry on working on a shopping centre project in High Wycombe.

The company is refocusing its UK activities on development and fund management.

Under the UK leadership of James Tuckey the company is planning to launch a European property fund, aimed at Australian private and institutional investors, which could be worth up to €500 million (£335 million). In the UK, Multiplex is mulling the launch of a £200 million institutional fund.

The company has sold off most of its stakes in big developments and is trying to start afresh.

It is a far cry from January last year when Andrew Roberts, Multiplex’s chief executive, could boast that the company had lined up a £13 billion development portfolio in the UK, with stakes in high-profile projects including the £4 billion Stratford City development in East London and the White City shopping centre.

At that point the company had a portfolio of projects to rival some of Britain’s biggest FTSE 100 property companies.

But even then critics complained that Multiplex had expanded too rapidly and predicted problems ahead.

Just one month later Multiplex was forced to admit that it would make no profit on the Wembley stadium construction contract — since then losses on the project have spiralled to an estimated £200 million.

The stadium looks unlikely to be ready for another year and Multiplex remains locked in a series of legal disputes over its delivery of the project.