The contract win represents a vote of confidence from contractors and customers in Carillion's ability to deliver on projects.

The construction and support services company's shares were up nearly 7 percent by 0930 GMT and were the biggest gainers on London's FTSE midcap index <.FMTC>.

Carillion has lost nearly 80 percent of its market value since mid-July, when it booked a 845 million pound writedown on problematic construction contracts and said Richard Howson would step down as chief executive. Howson has since been named chief operating officer.

There has been speculation that the company may have to raise at least 500 million pounds and could announce a rights issue alongside its results on September 29.

Property group Ask Real Estate, which is developing the Manchester project, confirmed separately that Carillion was the contractor for the development, which will include a hotel and offices built on a 1.74 acre site next to Manchester Central convention centre and the Hilton Tower.

Ask had estimated last year that the project, to be built on the former Bauer Millett car showroom site, could comprise over 750,000 square feet of development at a projected value of about 300 million pounds.

The news was first reported by trade publication Construction News. A spokesman for Carillion confirmed that the company was the main contractor on the project, declining to give any further details.

Carillion, the second largest contractor for the British government, has won multiple public contracts since its July profit warning, including work worth 1.4 billion pounds to help to build Britain's High Speed 2 railway.

Under the Manchester contract, Carillion and Ask will work in partnership with Transport for Greater Manchester, Manchester City Council and Manchester Central.

A spokeswoman for Ask said the developer would update the market on the project in mid to late September.

(Reporting by Esha Vaish in Bengaluru. Editing by Jane Merriman)

By Esha Vaish