Fund managers have reacted with horror to the decision of Marconi's co-broker UBS Warburg to slash its earnings forecasts for the company, and to the attempt by chief executive Lord George Simpson to re-price its share options.

Marconi's share price fell 17p (€0.28) to 249p Wednesday morning after Warburg cut its estimated earnings per share from 18p to 13p for the year to March 2002, and from 21p to 17p for the following year. Warburg is the UK telecommunications equipment company's joint house broker. Another broker, Schroder Salomon Smith Barney, also moved its target price down from 500p to 320p.