THE Russian oil giant Rosneft is poised to halve the size of its controversial London float this summer, raising about $10 billion (£5.5 billion) rather than the £11 billion forecast.

Sources in Moscow said the company planned to have the deal completed by the end of July, with a prospectus likely to be published in June.

The float will lead to the state-owned company’s shares being listed in Moscow and London. It was expected to be the world’s biggest ever float, trumping the £9.9 billion raised by the Japanese company DoCoMo in 1998.

But it is understood the Russian government plans to sell only enough shares to repay a £4 billion loan taken out last year to buy a controlling stake in Gazprom.

Rosneft’s own fundraising requirements have also been eased by a recent refinancing that has cut interest bills by a third.

The deal is still likely to create considerable controversy in Britain. Last week F&C Asset Management said investors should shun the shares because of the legal and corporate-governance risks involved.

Top institutional investors and their trade bodies are now set to demand that the Financial Services Authority (FSA) examine changes to the rules governing foreign companies floating in Britain to ensure greater shareholder protection.

Karina Litvack of F&C said: “It would be helpful if there were a clear message from the FSA that, irrespective of domicile, companies listing in London must adhere to some level of best practice, such as the principles in the Combined Code, or provide an explanation why not. We have raised this matter with the FSA and feel the volumes of foreign companies coming to London are now such that it needs to act before something goes wrong.”

Peter Montagnon, director of investment affairs at the Association of British Insurers, said: “There are definitely issues here that need to be discussed because the volume of foreign companies is increasing. We are sympathetic with the position of F&C.” But business leaders said Britain needed to be careful not to deter foreign companies by creating a version of Sarbanes-Oxley, the draconian American corporate-governance law.

Paul Boyle, chief executive of the Financial Reporting Council, said: “There is a danger that imposing these requirements will mean foreign companies won’t come to the UK and so deny investors the chance to buy shares.

“There needs to be a debate. We should aim for proper disclosure and then fund managers must make up their minds whether to buy the shares.”

A spokesman for Rosneft yesterday dismissed F&C’s concerns, and similar criticisms from the billionaire financier George Soros. “The prospectus will contain all relevant information for investors,” the spokesman said. He confirmed the group planned to recruit three new independent directors.