BRITISH Telecom shareholders were sent reeling yesterday as the telecoms company revealed its finance director Philip Hampton would be stepping down.

The move comes just eight days after chief executive Sir Peter Bonfield left BT, receiving a pay-off of close to £1.5m.

Mr Hampton told BT he wanted a new challenge after helping the group to slash its debt and preparing the demerger of its mobile phone arm mmO2.

Chairman Sir Christopher Bland said Mr Hampton's contract would not be renewed beyond next November, adding he would leave "on a date agreed with me".

News of the decision, which follows weekend speculation, came as BT reported downbeat figures for the second quarter of the year.

BT's business has been transformed in recent months in an effort to slash debt.

The mmO2 business, which includes BT Cellnet and Germany's Viag Interkom, will be spun-off on November 19.

BT has sold its Yellow Pages business, minority interests overseas, and launched a £5.9bn rights issue.

Last month, it announced it is to end the loss-making joint venture it ran with US firm AT&T leading to a one-off charge of more than £1.2bn.

The group made a pre-tax loss of £1.35bn in the three months to the end of September, compared with a pre-tax profit of £471m last year.

The group achieved earnings before one-off costs of £1.46bn in the three months to the end of September, down from £1.57bn a year ago. Turnover in the quarter rose marginally to £5.30bn.

Sir Christopher said BT's restructuring was "progressing well" with debt down from £28bn earlier this year to £16.5bn