Noel Forgeard, once the most powerful man in Europe's aerospace industry, suffered a stinging humiliation today as he was detained by police in connection with the insider trading allegations that have rocked EADS, the aerospace and defence giant.

Mr Forgeard was summoned for questioning by the Paris police's financial division, where he was told that he would be placed in custody over claims that he used privileged information to earn millions of euros from his stock options in 2006.

The move increased fears that EADS's current executives could receive similar treatment at the hands of French justice over the scandal.

Mr Forgeard, 61, could be put under formal investigation on suspicion of insider dealing by a magistrate at the end of his detention, which can last a maximum of 48 hours.

The offence carries a maximum fine of €1.5 million (£1.2 million) or 10 times the profits made from the operation under French law.

Mr Forgeard was questioned after a report by the French Financial Markets Authority (AMF) pointed to "massive" insider dealing by 17 executives at EADS and Airbus, the group's aircraft manufacturing division, many of whom still work for the company.

They are accused of selling stock in 2005 and 2006 before production delays to Airbus' flagship A380 became public knowledge, wiping 26 per cent off EADS's share price and €5.5 billion off its market value.

Mr Forgeard is alleged to have known about the looming crisis when he sold 360,000 shares in November 2005 and March 2006 for a total of €4.3 million.

According to official documents, he exercised an option to buy the shares at a price of between €15 and €17 and sold them at €32.01, three months before the problems in the A380 factories were revealed.

Louis, Catherine and Marie Forgeard, his children, each received €1.4 million when they sold 42,666 shares in March 2006.

The AMF claims EADS misled the market with over-optimistic reports that inflated its share price before announcing the extent of its difficulties in June 2006.

In its report, the authority also pointed the finger of suspicion at EADS's two main shareholders, Lagardere, the French media group, and Daimler, the German carmaker, which announced the sale of stock in April 2006.

They - with Eads and its current and former executives - deny the allegations.

In a newspaper interview last year, Mr Forgeard said he had been unaware of the delays with the A380 when he exercised his stock options and had done nothing wrong.

"I can tell you that there was no insider trading by executives at Airbus and EADS. I was there throughout this period, I know what I'm talking about, " he said.

Mr Forgeard was forced to stand down in July 2006 but was paid an €8.5 million golden parachute, a form of severance pay usually associated with takeovers and mergers.

His detention comes as Airbus faces fresh difficulties amid claims by French managers that they are being sidelined by their German counterparts.

Louis Gallios, the chief executive of Eads, is to travel to Airbus headquarters in Toulouse, south-west France, tomorrow in an attempt to appease Gallic anger over the so-called Teutonic plot.

There was further bad news today when John Leahy, Airbus's chief salesman, said he expected orders to be delayed and cancelled because of the rising price of fuel.

The company is anticipating about 20 orders instead of 30 for its A380.

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