Croydon’s roads are in safe hands the council has said, despite financial difficulties connected to the company who has taken on the contract.

EnterpriseMouchel shareholder Mouchel is £87m in debt it has been revealed.

In the wake of the shocking figures, senior officers at the council wrote to the company, who have just entered into a £35m deal.

The council allayed fears as EnterpriseMouchel is a separate limited company and is not dependent on either parent company for funding.

It operates its own insurances and pension arrangements entirely independently from the parent companies.

The company has told Croydon Council its turnover in the 12 months to July 2011 was £170m, and the business continues to be both profitable while maintaining a strong healthy balance sheet.

A statement was made to Monday’s full council meeting, saying there was no risk to taxpayers.

Councillor Dudley Mead, cabinet member for resources, also reaffirmed the way the deal was structured meant money would only be paid for work completed.

Following the meeting EnterpriseMouchel wrote to the council to update on its position, saying it had a strong order book and was sustainable.

Coun Mead said: “I think it vitally important that Croydon residents understand that before any contract is entered into unless financial analysis is done.

"No money has been paid up-front and the council will only pay for work when it is completed.”