Rolls-Royce will be dropped from the FTSE

The two giants are to be ousted from the country's index of leading shares together with insurance giant Royal & Sun Alliance and engineering group Invensys.

The four will be dropped from the FTSE because of their falling share prices.

Replacing the four in the FTSE 100 will be telecoms giant Cable & Wireless, water and sewerage company Kelda Group and financial companies Provident Financial and Foreign & Colonial Investment Trust.

The FTSE reshuffle is carried out every three months to make sure the index represents the UK's largest publicly listed companies.

Double blow

The rejig is subject to approval of a FTSE committee, which meets after close of business on Wednesday.

British Airways had been a member of the FTSE since its flotation in 1987 until September last year.

BA then made its way back into the elite in December 2002, but now that a war with Iraq is looming ever closer it is set to once again fall out.

BA shares have fallen sharply this year, in line with other airlines, as investors have serious doubts about the industry amid the global economic slowdown.

The engineering group Invensys falling out of the FTSE would represent a double blow for Lord Colin Marshall - as he is the chairman of both companies.

A profit warning earlier in the year had investors dumping Invensys' shares, sending them down 50% in just one day.