WorldCom's demise could have other far-reaching effects, said James Truscott, chairman of Lloyd's insurer Euclidian.

He said insurers should expect a mood change among auditors.

"The concerns it raises will mean that auditors will have to take a great deal more care, which means audit fees will increase."

He expected this effect to hit the US harder than the UK, where rules are generally considered to be tougher already.

Truscott also pointed out that the fact that it was Enron's auditor, Andersen, that signed off WorldCom's books saved any reputational damage on the rest of their industry.

Andersen claims that WorldCom chief financial officer Scott Sullivan withheld information.

Sullivan was fired last week.

Truscott said: "Thank god it was Andersen.

"We would all have lost confidence in our auditors if it had been any of the others."