SHARES in Eurotunnel dropped more than ten per cent last night amid fears that creditors were preparing to take control of the business.

Analysts said speculation that the UK and French governments may urge banks to take control of the debt-laden Channel Tunnel operator was helping to unsettle investors.

According to reports, ministers are closely monitoring events at Eurotunnel after French investors ousted the board last Wednesday.

The governments are worried that the instability at Eurotunnel will lead to resignations of technical and safety personnel.

Justin Urquhart-Stewart, of Seven Investment Management, believed ministers would already be in contact with Eurotunnel creditors over the company's future.

He said: "The tunnel is a strategic asset, which has a political, geographical and economic impact.

"I would be concerned if they were not (speaking to creditors) because there are too many risks."

Shares in Eurotunnel have now fallen by more than 18 per cent since the change of board last Wednesday, as investors fret over the viability of any restructuring plan.

Eurotunnel has debts of £6.4bn and last year made losses of £1.3bn.

It must begin making capital repayments in 2006, but the size of its losses means it is unable to do so.

Shares were down 3.75p (11 per cent) to 31p.