The withdrawal of the world’s largest power supply business, which provided generators for the 2012 London Olympics and regularly supplies major sporting events around the world, deals a blow to the Rio Games.

There has been increasing speculation that preparations for the event are running into trouble, with reports of delays and budget over-runs.

Aggreko supplies generators to clients around the world

Brazil is currently in recession and the government has said it cannot afford to increase funding for the event.

Aggreko’s decision to pull out of bidding for such a major event could deliver a dent to the company’s earnings. The London Games contract was worth about £55m to the business and although the Rio event was expected to be smaller in scale, it was still likely to be a major source of revenue.

A profit warning in July caused Aggreko shares to fall more than 15pc, and the stock is now at about 900p, having fallen from above £17.00 at the start of the year. Lower oil prices have also weighed on the group.