Lloyd's has reacted angrily to claims that changes to its rules have caused its capacity to be devalued by almost half.

The attack on the market came from Anthony Hilton the city editor of the Evening Standard.

In an editorial, Hilton claimed a new formula, devised to calculate the value of members' assets they must set aside to back their underwriting, was wreaking havoc.

Hilton claimed the change could see up to 2,000 names forced to cease underwriting, and that the move had already caused the value of syndicate capacity to be slashed in half.

But a Lloyd's spokesman said: "The formula relates to risk based capital and that is working as we said it would. But the formula for calculating assets has not changed.

"The problem is that some names have failed to take into account is that solvency margins are kicking in.

"It is hardly surprising they are being asked to put more money up considering the past two years.

"With Moody's lastest loss forecast [at more than £3bn between 1998 and 2000], it is hardly surprising Names have to set money aside to meet solvency requirements."

The Lloyd's spokesman also denied that the value of capacity currently being auctioned was worryingly low.

"It is very, very early in the capacity bidding season and the pre-emptions we have received so far indicate that we are looking at a capacity of £11bn compared to £10.08bn last year," he said.