Theresa May has accused Labour of being anti-business as she said the Government had protected taxpayers from an “unacceptable bailout” following the collapse of Carillion.
The construction company plunged into liquidation on Monday after talks with banks and ministers to secure its financial future failed.
The Prime Minister was repeatedly questioned by Jeremy Corbyn about the Government’s handling of the crisis as the pair clashed at PMQs.
Mr Corbyn accused the Government of being “very negligent” in the way it had handled its relationship with Carillion as he suggested ministers were overseeing a “broken system”.
But Mrs May hit back and claimed Mr Corbyn was criticising the Government for ideological reasons.
She said: “What we want is to provide good quality public services, delivered at best value to the taxpayer.
"We're making sure in this case that public services continue to be provided, that workers in those public services are supported and taxpayers are protected.
"But what Labour oppose isn't just a role for private companies in public services - but the private sector as a whole.
“The vast majority of people in this country in employment are employed by the private sector but the shadow chancellor calls businesses the real enemy.
"Labour want the highest taxes in our peacetime history. Labour policies would cause a run on the pound.
“This is a Labour Party that has turned its back on investment, on growth, on jobs. A Labour Party that will always put politics before people.”
Mrs May repeatedly stressed that the Government was a “customer of Carillion, not the manager of Carillion”.
“It is also important that we have protected taxpayers from an unacceptable bailout of a private company,” she said.
But Mr Corbyn insisted the company's collapse had shown the model of out-sourcing services to the private sector needed to be reviewed.
He said: "This isn't one isolated case of Government negligence and corporate failure - it's a broken system.
"Under this Government, Virgin and Stagecoach can spectacularly mismanage the East Coast Main Line and be let off a £2 billion payment.
"Capita and Atos can continue to wreck the lives through damaging disability assessments of many people with disabilities and win more Government-funded contracts.
"G4S promised to provide security at the Olympics - failed to do so and the Army had to step in and save the day.
"These corporations need to be shown the door - we need our public services provided by public employees with a public service ethos and a strong public oversight.”
Mr Corbyn urged the Prime Minister to “act to end this costly racket of the relationship between Government and some of these companies”.
The Government has called for an Insolvency Service investigation into Carillion's directors to be "fasttracked and extended in scope".
Ministers are under intense scrutiny over decisions to award contracts to Carillion in 2017 after a profit warning was issued.
The company employs 43,000 people with nearly 20,000 of them based in the UK.