Labour leader Jeremy Corbyn has accused Theresa May's government of being "very negligent" for continuing to hand out contracts to collapsed construction firm Carillion after its third profit warning.

Speaking at Prime Minister's Questions, he said the 90% share price plunge and firm's record of failing to make wage payments should have forced government intervention.

"It looks like government was handling Carillion contracts to keep the company afloat or was deeply negligent of the crisis that was coming down the line," he said.

Mrs May defended the government's actions, playing down the threat of a profit warning and insisting the government was a "customer" of Carillion.

"If a government had pulled out every time there was a profit warning that would be the best way to guarantee a company failed," she said.

The Labour leader demanded Mrs May confirm "not a single penny more" would go to the Carillion executives after the firm's demise.

Mrs May said it was part of the investigation by the official receiver - which will examine past and present directors - to review retrospective payments and determine if they are "lawful or unjustified".

Mr Corbyn also called on Mrs May to end the "costly racket" of handing out public contracts to private firms.

Mrs May dismissed the suggestion, saying the government would continue to seek the "best value" for the taxpayer and accusing the Labour leader of opposing "the private sector as a whole" and putting "politics over people".

After Carillion's liquidation on Monday it emerged the firm had just £29 million in cash by the time it went bust.

Mr Corbyn has described Carillion's demise as a "watershed moment" that should bring an end to "rip-off privatisation" of public services.