I think we have stabilised the business. I am certain we are going to make it

Mike Parton, Marconi chief executive

The latest package would leave Marconi's UK operations employing about 7-8,000 staff, down from 12,000 in April last year.

Unions said they were working hard to avoid compulsory redundancies.

"Marconi is struggling against terrible market forces, " said Roger Lyons, general secretary of Amicus.

"Both the company and the union are determined to see what is the jewel of Britain's telecommunications crown through this crisis."

"We will deal with this together and will do all we can to avoid compulsory lay-offs."

Further losses

The jobs warning was released as Marconi revealed an operating loss of �130m over the past three months, with sales in core operations at �706m, more than one third lower than a year before.

Marconi's chief executive Mike Parton said he was sure the company would pull-through.

"There are fewer questions now about whether we are going to survive," he told reporters.

"I think we have stabilised the business. I am certain we are going to make it."

But he warned that trading would remain tough over the next 12 months.

"We believe we will have at least a year before the market improves. I think we have got a full year at these trading levels," he said.

City reaction

But City traders were unimpressed, marking Marconi's share price down.

"The debt has come in larger than we expected. The net debt was �3.5bn and we were looking for �3.2bn," one dealer said.

Marconi shares plunged 6.75p, or 17%, to 32p in early trade before recovering to close down 4p, or 10%, at 34.75p