We think this is it. This brings the business into a tightened shape.

Energis spokesman

The company, formerly part of electricity generating company National Grid, issued a profits warning last month.

The former high-flyer's shares slumped on Thursday, down 9.5p of 70% to just four pence by the close of trade in London.

Shares in the group, which was dumped by the FTSE 100 index in September, were worth nearly 800p two years ago.

Enough is enough

Enerigs' UK job cuts come on top of 450 lay-offs announced last year.

A spokesman for the firm said: "We think this is it. This brings the business into a tightened shape."

The company, which has debts of �1.2bn, also said it was in talks with its banks to amend terms on its loans which it admitted it had breached.

National Grid, which owns about 36% of the firm, warned it should not be relied on for additional financial support.

In January, the company said pre-tax profits for the year to March would come in about 10% below analyst forecasts of �104m, and announced plans to cut costs and investment by �30m and �40m respectively.

Energis is also to sell its loss-making continental European units.

Share price down

Colt said that while turnover increased in 2001, it needed to shed about 500 staff in order to achieve its growth targets.

The group posted a pre-tax loss of �75m for the three month period to December, in line with broker forecasts.

The group started in 2001 with 27 cities on its fibre optic network, including London, Birmingham and Dublin.

It now has 32, having added Manchester, Valencia, Lisbon, The Hague and Copenhagen.

Shares in Colt stood at 42.5p - down 11.25p - at 1530 GMT.