Louis Gallois, the chief executive of EADS, sought today to draw a line under the insider trading dispute that has shaken the European aerospace and defence giant when he called for a ban on the company's stock options schemes.

At the same time, the opposition Socialist Party in France urged a parliamentary inquiry into the allegations of malpractice among executives.

Mr Gallois said that he would ask the board of the Franco-German group, which makes Airbus aircraft, to end its stock option scheme, which he described as a “lottery”.

He told Le Monde: “I will propose to the board that we ban this system totally.”

Mr Gallois said that the company should replace stock options by extending the award of free shares to senior managers.

He said: "Today, stock options represent only 20 per cent of bonuses and free shares 80 per cent. We need to go to 100 per cent.”

Mr Gallois, who joined the company in the wake of the dispute, added: “We should also think about how to sell shares in a manner that is above suspicion. The sales could be automatic, for example.”

He insisted that the allegations would not derail Airbus’s cost reduction plan, which involves 10,000 redundancies in an attempt to save €2 billion (£1.39 billion) a year from 2010.

Mr Gallois’s comments follow a preliminary report by the French Financial Markets Authority (AMF), which accused 21 present and former executives at EADS and Airbus of “massive” illegal share dealing — mainly through the exercise of stock options — in 2005 and 2006.

The watchdog, which said that the managers had made total profits of about €90 million, also denounced EADS’s two main industrial investors — Daimler, the German carmaker, and Lagardère, the French aerospace and media group.

Inspectors said that they had exploited insider knowledge when they both announced the sale of 7.5 per cent stakes last year.

The transactions took place before production delays in the flagship A380 aircraft were made public, wiping 26 per cent off the share price of EADS.

The controversy has been fuelled in France by the revelation that the Caisse de Dépôts et Consignations (CDC), the state-owned lender, had paid €600m to buy a 2.25 per cent stake in EADS from Lagardère before the share price plummeted.

With left-wing MPs seeking to implicate President Sarkozy in the scandal, Dominique Marcel, the financial director of the CDC, said that the lender had acted without demanding permission from the authorities.

He said: “We didn’t want to inform the State of this operation.”

However, André Vallini, a Socialist MP, said that the party would demand a parliamentary inquiry into the French Government’s role in the controversy.

Mr Sarkozy, who was Interior Minister at the time, has been embarrassed by the affair because he is close to Arnard Lagardère, the chairman of Lagardère.

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