An investigation into the construction industry has revealed the need for " significant enforcement" action, the Office of Fair Trading's director of cartels has warned.

The OFT announced in March that the UK construction industry was a priority for 2005.

The probe concerns sub-sectors of the industry, including construction contracts for big infrastructure projects and housing.

Speaking to a competition law conference, Simon Williams, director of cartel investigations, said: "On the basis of the leads we have already developed, we anticipate significant enforcement action in parts of the UK construction sector."

The OFT can fine companies found in breach of the UK Competition Act up to ten per cent of their annual worldwide turnover in its latest business year.

In March last year, the OFT imposed a near £300,000 fine on a flat roofing services cartel in the West Midlands.

Nine roofing contractors - Apex Asphalt & Paving Co, Briggs Cladding & Roofing, Brindley Asphalt, General Asphalt Company, Howard Evans (Roofing), Richard W Price, Redbrook Mastic Asphalt and Felt Roofing, Rio Asphalt & Paving Co and the Solihull Roofing and Building Co - were found to have agreed to fix the prices of repair, maintenance and improvement services for flat roofing in the region through collusive tendering.

However, earlier this year two of the firms launched an appeal which resulted in a reduced fine for one of the cartel. An OFT spokesman said fines had also been imposed on a roofing cartel in the North-east.