Balfour Beatty is one of 40 contractors which allegedly subscribed to an illegal blacklist containing sensitive information - including personal relationships, trade union activity and employment history - on more than 3,000 construction workers.

The revelation provoked outrage among union members and Labour councillors, who are now calling on H&F Homes to cancel its contract with Balfour Beatty.

They say the list discriminates against certain workers and represents an unwillingness in the construction industry to employ union members because they are seen as more likely to raise burdensome health and safety concerns.

The Information Commissioner's Office revealed the blacklist on March 6 after a raid on premises in Droitwich.

It was allegedly compiled by private detective Ian Kerr, who now faces prosecution under the Data Protection Act.

Construction firms which use the list to vet potential new employees and they could now be subject to legal action from individuals unfairly refused employment.

A spokesman for the H&F Homes said it would not act on the list since allegations against the contractor have not been proven.

But Gwen Cook, of the Hammersmith and Fulham Trade Union Council, insisted it detach ties with the firm.

"The construction industry is one of the least safe for workers ever and to top it all off they have a black list of people who want health and safety put into the job," she said.

"This is not a company the borough should be associated with and the contract should be terminated."

Lisa Nandy, who is on the council's housing scrutiny panel, said: "Having a company working for you that has blacklisted people because they are trade union members is completely unethical.

"It must be contrary to all the principles that H&F Homes claims to stand by and so it should terminate their employment. A public body can't employ people who are so blatantly anti-union."

A spokeswoman for Balfour Beatty refused to comment on the Labour group's demands, only issuing a statement saying it would co-operate with investigations by the Information Commissioner.

The ICO is to operate a dedicated enquiry system from March 16 for people who believe personal information about them may be held on the database.