MARCONI Corporation’s hopes of revival were shattered after the company was dumped by its biggest customer, BT.

The telecoms equipment provider saw £304 million, or 38 per cent, wiped off its stocket market value after BT’s shock decision to exclude it from participating in a £10 billion network upgrade.

As Marconi shares fell to their lowest level since being relisted on the stock exchange in 2003, the chances of the company remaining independent faded almost entirely.

Senior Marconi sources conceded that a sale of the business in whole or part was now the only way to realise long-term shareholder value. Huawei, the Chinese telecoms equipment giant, was tipped by analysts as a potential buyer.

The snub by BT, which accounts for nearly 30 per cent of Marconi’s sales, puts at risk nearly 3,000 jobs in Coventry and Liverpool. Last night Amicus, the union, called for an urgent meeting with the company.

Mike Parton, Marconi’s chief executive, admitted that the company had been unable to compete with larger overseas rivals on price when tendering for the contracts to supply the new BT network. Instead, the former telecoms monopoly had handed all the work to foreign players, including Huawei, Japan’s Fujitsu and Lucent of the US.

Mr Parton said: “This is a disappointing outcome. Our products performed extremely well technically but we were unable to meet BT’s commercial requirements.” Marconi said that if it had squeezed prices any lower, it would have failed to make a return. BT sources confirmed that Marconi had matched its competitors on product quality. BT is hoping the new network, due for completion in 2009, will offer its customers sophisticated new services, such as broadband television and TV-on-demand.

Mr Parton refused to quantify the number of job cuts, but emphasised that Marconi would continue to supply equipment and services to BT under several existing multi-year contracts. The longest of these lasts until 2008.

Shareholders were stunned by yesterday’s announcement. As recently as Friday analysts had said it was “extremely unlikely” that Marconi would be entirely excluded from the new BT contract. “It’s not just that they did not win work for the new network, but that they did not win any of the work,” one investor said.

Richard Windsor, analyst at Nomura, said: “The outlook for Marconi remaining an independent company now is pretty poor.”

Dresdner Kleinwort Wasserstein said the news was a “major blow to Marconi’s long-term prospects”. The once great industrial giant, which at its peak as Lord Weinstock’s GEC had 55,000 staff, today employs 4,300 people in the UK. Nearly 3,000 work directly on BT contracts, which provide £89 million of revenues.

Amicus expressed outrage that all of the work for the new network had gone to foreign-owned suppliers. Though work to service the network — known as 21CN — is still up for grabs, analysts said it was unlikely that Marconi would win a contract to maintain the equipment of other companies.

Marconi, once valued at £35 billion, was nearly crushed by huge debts amassed under Lord Simpson of Dunkeld. But it had wiped out its £669.5 million debts ahead of schedule and at the end of last year sales were at £330 million, up 8 per cent on the previous period.

Mr Parton, who led Marconi out of its financial crisis, now has little chance of picking up the final tranche of a bonus share option plan that could have been worth £8 million. Marconi shares fell 184p to 298p.