McDonald's Japanese operations, struggling with a persistent recession and fears over mad-cow disease, has seen its shares fall to a fresh lifetime low.

Shares in McDonald's Holdings fell another 1.1% on Monday, and have now lost 47% of their value since listing on the Jasdaq market in July last year.

Sales at McDonald's 3,800 Japanese outlets have plunged since the Japanese outbreak of mad-cow disease last September, despite reassurances that it only uses imported beef.

The company has made strenuous attempts to reverse the situation, and on Monday announced price cuts of up to 25%.

But investors doubt whether the cuts could reverse the downtrend, fearing instead that they might spark a damaging price war.

Fortunes of war

Lotteria, a smaller hamburger chain rival, has already said it will cut prices by the same amount as McDonald's from 10 August.

Fears over a price war have clouded an already gloomy picture at McDonald's Japan, which in March began to scale back on its once-lofty ambitions.

Over the past five years, the firm has increased its Japanese network by a net 250-450 restaurants every year, but is likely to add fewer than 100 outlets in 2002.

When shares in McDonald's Japan were floated in Tokyo last July, the firm said it was on course to triple its branch network, with new restaurants in schools, hospitals and even on the famous bullet train.