Staff at Galliford Try's struggling housebuilding business have been put on a four-day week to save cash and avoid additional job cuts.

The construction group, which also warned it expected to halve its interim dividend, has cut 340 workers in its housebuilding business over the past 12 months, or 43 per cent of the division, as the property market crumbles..

Greg Fitzgerald, chief executive, said: "By reducing people down to a four-day week it has meant we've not shut any offices and we've basically kept the fabric of the division intact. I think we're the first housebuilder to do so, but we won't be the last."

The company said the housing market remained "extremely difficult", with recent trading in line with market expectations.

Mr Fitzgerald said cutting the dividend would give the group extra cash to take advantage of opportunities such as distressed land sales, or even sales of companies.

He predicted that when the housebuilding recovery eventually came, Galliford would be higher up the league table for UK housebuilders than its current eighth place. Last year, Galliford paid an interim dividend of 0.9p and a total distribution of 3p.

Larger rivals Persimmon and Bovis last week said they were scrapping final dividend payments and restructuring their finances as the downturn in housing showed no sign of abating.