A FAMILY feud is brewing at one of Britain’s largest private companies after a group of shareholders at Miller Group, the housebuilding and construction empire, put its majority stake up for sale.

Members of the Miller family, who together speak for 60% of the shares, have appointed accountants Ernst & Young to carry out a strategic review of their holding. This is expected to trigger a sale that could value the business at about £1.2 billion.

But Keith Miller, the group chief executive, who controls 17%, is not part of the group.

One City source said: “The management team are not going to be fazed by this, but it looks like it could be heading for a big family fight.”

Miller, one of Britain’s biggest players in housing, commercial property and public-sector building contracts, was founded in Edinburgh 74 years ago. It now employs about 2,000 people across the UK. Keith is the son of John Miller, one of the trio of brothers who set up the firm.

It is understood the group pushing for the sale comprises predominantly second and third-generation family members, including James Miller, a former chairman of the company who is Keith’s cousin.

It is believed the group have the majority of their personal wealth locked up in the business, and are keen to cash in on the group’s strong growth and the consolidation in the housebuilding and property sector.

It is understood they are keen to sell out ahead of changes to the capital gains regime next year which would increase their tax bill from the sale.

Ernst & Young has approached a number of leading housebuilders, as well as banks and private-equity groups.

Keith Miller claimed this weekend there was “nothing unusual” about the proposed stake sale. “Some of the shareholders want to diversify their investment portfolio. It is their prerogative to do that,” he said.

It is believed the Miller board has put forward its own proposal to buy back a significant part of the 60% stake, but so far no agreement has been reached.

Well-placed City sources said the group had an estimated enterprise value — the value of its shares plus its debts — of about £1.2 billion. The debt amounts to about £700m.

At the half-year stage, the group unveiled a 5% increase in profits before tax and exceptional items to £35.8m, boosted by a 50% rise in property profits and a record £650m order book.

One housebuilder familiar with the sale process warned the auction was ill-timed because of the uncertain housing market.

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