Shares in QinetiQ, the defence technology company, today fell by nearly 8 per cent after the Ministry of Defence (MoD) revealed plans to sell its 18.9 per cent stake in the company, raising more than £260 million for the Exchequer.

QinetiQ's stock fell 7.4 per cent, or 16.75p, to 206.75 as investors reacted to the sudden flood of new stock.

The company was formed from the Defence Evaluation and Research Agency and privatised in 2003. It specialises in advanced defence technology, such as bomb disposal robots and extreme high-altitude aircraft.

The privatisation of QinetiQ was criticised last year by the National Audit Office, which said the Government had raised too little money.

But the value of top executives' investment in the company rose by 200 times, turning them into millionaires.

Carlyle Group, the US private equity firm, bought a stake in QinetiQ during the privatisation for £42 million and sold the shares when the company floated in 2006 for £370 million.

The MoD will retain a golden share in QinetiQ to allow it to veto takeover proposals.

The MoD said in a statement: “The offering will be effected by way of an accelerated bookbuilt offering to be launched immediately."

Credit Suisse, JPMorgan Cazenove and Merrill Lynch have been appointed as joint global co-ordinators and bookrunners for the placing.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive