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On this occasion, however, the market made the correct judgment. The accommodation that has been agreed between the company and Ofcom over access to the local loop is a sensible one. It had been clear that if Ben Verwaayen could not produce a plan that would meet the regulator’s demands for all users of the local loop to be given equivalent treatment to BT itself, then the threat of enforced break-up would become a reality.

There was no point in the company railing against the demand that it should be generous with its assets. If there is to be proper competition in communications, then equal access to the local loop infrastructure has to be made available. It was BT’s because of its historic monopoly position; now competition is king.

So BT will set up Access Services and encourage its employees to believe that they are entirely unrelated to BT, which will, however, continue to pay their wages. Headhunters will be set to work to find independent directors for this new entity and new uniforms will be provided for its staff.

If it fails to deliver the fair play that BT has promised, Mr Verwaayen will be in front of the Competition Commission and on his way to a full break-up of his business. He continues to argue that this would further disadvantage BT, although those who are working for Access may come to see the logic of full separation.

In the meantime, he hopes that good behaviour over the local loop will result in lighter regulation in those areas where BT is facing strong competition from other telecoms providers. Ofcom’s Stephen Carter has indicated that he will move quickly on this front. Yesterday both BT and its rivals were full of praise for Mr Carter and Ofcom. This was regulation with firm principles and pragmatic implementation, they said.

BT, which was so regularly slated for being a dinosaur of the telecoms world, has just been ranked 13 out of 1,000 “global pace-setters” by Business Week. For Mr Verwaayen, the argument over the local loop was a hangover from the past. He is concentrating on taking BT forward.

AIM grows out of the nursery

LAST night the London Stock Exchange celebrated the tenth birthday of what it boasts is the world’s leading growth company market. In 2004, the Alternative Investment Market raised £4.65 billion for 355 companies and is on course to beat those numbers this year.

But the undoubted success of AIM, with its lighter and cheaper regulatory regime, is in contrast with the trend on the main market. At the end of the year in which AIM launched, there were about 2,000 companies on the LSE, (excluding those Irish securities that then bolstered the total). Today, there are only 1,416.

AIM, which was conceived as a nursery for companies that would move on to the grown-up market when they were bigger, has seen more than twice as many companies move from the main market to join it than have moved in the opposite direction. There is no sense of ignominy in moving down.

As the LSE goes around the world in an effort to persuade overseas companies that they should come to London to list rather than head to New York, its emissaries have found huge enthusiasm for what AIM has to offer. Apparently, “several hundred” Chinese companies, for instance, have expressed an interest in floating on AIM. There are already six Chinese companies on the LSE’s main market, including Air China, which joined in December.

The higher level of risk that AIM companies can offer appeals to many private investors. But it is now too big for any investor to ignore.

• JUSTIN KING is benefiting from the miseries of Wm Morrison. Had he not made progress in sorting out J Sainsbury’s own problems, this might not have been the case. But the like-for-like figures he produced yesterday, showing an increase of 1.3 per cent in non-petrol sales, will look far from impressive compared with the numbers from Tesco. The market may have been “more difficult and competitive”, as Mr King said, but that will not stop Sir Terry Leahy today reporting more than 5 per cent growth.

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