Construction giant Balfour Beatty is paying £2.25m to settle a Serious Fraud Office (SFO) investigation into its work on construction of the enormous Bibliotheca Alexandrina in Egypt.

The SFO says the move, after which Balfour Beatty will not face criminal charges, is its first civil recovery order involving a major public company.

The office said yesterday that the case related to "inaccurate accounting records arising from certain payment irregularities". These occurred once the project, which ran from 1996 to 2001, had already begun.

Balfour Beatty itself raised the issue with the National Criminal Intelligence Service three years ago on discovering the issue and the agency told the company the SFO should look at it.

"The SFO has concluded in the circumstances of this case that the prosecution of any individual or corporate entity is not merited.

"By proceeding in this way the SFO has been able to impose a significant sanction on a major UK company whilst avoiding the extensive cost to the public purse of lengthy court proceedings," the SFO said.

It added that the construction company has agreed to boost its compliance systems. A now-defunct subsidiary of Balfour Beatty, whose interests in Scotland include its role in a consortium to build the M74 extension in Glasgow, participated in a joint venture to rebuild the Great Library of Alexandria.

Originally founded in the third century BC, the destruction of the original building has been blamed on everyone from several Roman emperors in the first century to Arab invaders 600 years later.

The new library and cultural centre was built to commemorate the original and its granite walls are decorated with letters from 120 languages.

The building can accommodate eight million volumes on its shelves and the main reading room covers 70,000 square metres on 11 levels topped with a glass panelled roof tilted towards the sea.

Balfour Beatty said: "This agreement expressly recognises that Balfour Beatty acted promptly and responsibly in connection with the matter, that Balfour Beatty has co-operated with the SFO throughout the investigation, and that appropriate steps have been taken to ensure no recurrence could take place in the future."

Its shares closed down 7.6% yesterday at 291p in a falling market.