Islington Council has said it will terminate the contract of any firm found to be blacklisting construction workers.
The north London council has gone further than any other authority by unveiling "decisive action" in the wake of continued controversy over secret lists of workers.
Unions are continuing to campaign for justice for thousands of workers whose names were discovered on a blacklist five years ago, drawn up on behalf of a number of construction firms.
Many believe they have been denied work if their name was on the list, often for merely raising health and safety issues on building sites.
The council said firms which want council contracts must show they do not practise blacklisting, while those who have done in the past have to prove they have stopped. Any contractor caught using a blacklist in the future will have their contracts ended.
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