Michael Gove has given 11 housebuilders – including one affiliated with the main contractor on Grenfell Tower – a last-minute reprieve after they failed to sign up to a government safety scheme by Monday’s deadline. The levelling up secretary revealed on Tuesday that 39 companies had signed up to the building safety contract, which details how they will replace any flammable material found in their mid-rise developments in England. The contract is a key part of the government’s response to the Grenfell fire, and will force housebuilders to spend a collective £2bn on remediation works. But Gove said on Tuesday that Rydon Homes, a sister company to Rydon Maintenance, which led the refurbishment before the fire during which combustible cladding was added to the building, was one of those that failed to sign up in time. Rydon said it did not believe it should have to sign the contract, which is aimed at larger housebuilders, as it was too small. A spokesperson said: “Rydon Homes develops an average of 16 family homes per year, which confirms our belief that Rydon Homes falls into the category of a small housebuilder. We have made this point to the Department for Levelling Up, Housing and Communities (DLUHC) but have had no response.” Gove had threatened that any company that failed to comply with the deadline would be barred from building residential properties in England. But he deferred that prospect on Tuesday, saying the government would first set up a “responsible actors scheme” for those that had signed, giving more time to those that have not yet done so. Gove told MPs on Tuesday: “The overwhelming majority of major developers have signed; some regrettably have not. Parliament has made clear what this means and so have I. Those companies will be out of the housebuilding business in England entirely, unless and until they change their course.” Gove has spent much of the past week tweeting threats at major housebuilders and urging them to sign the contract, which sets out all the remediation work they must do to mid-rise developments they built in the last 30 years. Developers complained of delays at Gove’s department, with many not receiving final copies of the contract ready to sign until this weekend. Several housebuilders said they were in discussions with civil servants about exactly which buildings would have to be retrofitted right until the deadline. Gove singled out one large developer, Galliard Homes, for criticism, calling it “one of the companies that has been most recalcitrant throughout”. He added: “If you have a company like Galliard, whose owners, directors and investors are determined not to play ball, then the consequences will come.” Galliard, however, said it had not been given enough time to review the contract. A spokesperson said: “To thoroughly assess the financial and administrative liabilities of the contract, we are in constant dialogue with DLUHC and have requested further time to complete our review process.”