Some opponents fear a threat to Telstra's rural services

Telstra executives have blamed tighter regulation for an expected slide in profits, triggering a near 6% slide in its stock price over two days.

That has angered Prime Minister John Howard, who is pushing a long planned privatisation through parliament.

Chief executive Sol Trujillo's comments were "disgraceful", he said.

"I think it is the obligation of senior executives at Telstra to talk up the company's interests, not talk them down."

Impending sell-off

Mr Howard's comments came at a meeting of government MPs and senators to discuss the 30bn Australian dollar ($23bn; �12.5bn) sale of the government's 51% stake in Telstra.

The plan was stalled for several years in the face of an opposition majority in the Senate.

They have landed at one of our nation's major assets and are quietly trying to flush it down the toilet Senator Barnaby Joyce

But Mr Howard's Liberal Party now controls both chambers of parliament, and the sell-off now looks set to go ahead as long as he can overcome reservations about issues such as ensuring service to Australia's far-flung rural communities.

It is this issue that helped spur increasingly outspoken complaints from Mr Trujillo, a US telecoms veteran, and his largely US-sourced team.

The government wants to split the company's monopoly phone network away from its retail arm to enhance competition, but to leave intact service obligations, which Telstra says could cost the firm A$850m this year.

Overall, slow growth in the mobile market and a faster than expected slide in fixed-line revenues mean profits will fall 10% this year, Mr Trujillo said on Monday.

A week earlier, his head of regulatory and policy issues said he would not advise his own mother to buy Telstra shares - a comment that drew trenchant criticism from Liberal Party legislators.