Atos Healthcare, the firm responsible for testing disabled benefit claims in "fitness for work" tests, is in talks to exit its £500 million contract with the government early after its staff received regular death threats.
Atos confirmed that its officials have been talking for "several months" with the government about its contract, with is due to run to August 2015.
The French-run benefits-testing firm has recorded around 163 incidents a month last year of member sof the public assaulting or abusing staff, both in person and online, the Financial Times reports.
Examples on Facebook were said to include: "murdering scum ... won't be smiling when we come to hang you bastards".
The company has regularly come under fire over the assessments - which are used to gauge eligibility for employment and support allowance and incapacity benefit - amid claims people are being wrongly recommended for work, or put through stressful medical interviews.
A spokesman for Atos insisted that they would not "walk away" from the contract and that it would continue to provide a service until new contractors had been appointed.
"For several months now we have been endeavouring to agree an early exit from the work capability assessment contract which is due to expire in August 2015," the spokesman said.
"Despite these ongoing discussions, we will not walk away from a front-line service.
"Our total focus remains on delivering the services we are contracted to provide in a professional and compassionate way until a new service begins."
Nevertheless, relations with the Department for Work and Pensions (DWP) appear to be close to breakdown amid persistent criticism over the quality of its assessments.
Last summer it was announced that the company, which was originally appointed by the last Labour government in 2008, had been instructed to implement a "quality improvement plan" following an "unacceptable" deterioration in the quality of its written reports.
At the same time the DWP said it would be seeking to bring in additional providers in order to increase capacity and cut waiting times.
Then last week disability minister Mike Penning told MPs the volume of appeals against the assessments - around 600,000 since their introduction - meant there was "real concern" about the work being carried out.
The DWP today refused to comment on its discussions with Atos, with a spokesman saying: "We prefer to maintain a professional relationship and not comment on ongoing commercial discussions that may be taking place."
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