A construction firm working on CAPA College's new flagship centre in Wakefield has gone into administration.
Construction group, Clugston, had been working on the new site opposite Wakefield Westgate station but the company has collapsed with reported debts of £40 million.
Work on the college's new site has since stopped.
A statement from the college this week read: "On Friday morning we received the disappointing news that Clugston have filed for administration.
"We are already working with the Department For Education on moving forward to appoint new contractors to complete our flagship home."
Construction on the new building began in late August.
The college's new home will house a 150-seat theatre, an outdoor amphitheatre, dance, singing and drama studios, media, television and design studios, production and technical workshops and a public cafe with outdoor terrace.
It was to be the first project delivered by Clugston under the Education and Skills Funding Agency (ESFA Framework).
James Clark, associate partner at KPMG and joint administrator for Lincolnshire-based Clugston said this week that buyers are now being sought for the existing contracts.
More than 150 employees have been made redundant by the firm already.
KPMG added: "The joint administrators will continue to trade certain divisions and are seeking to sell valuable contracts, with 262 members of staff retained to assist with this."