Marsh is to cull a further 2,500 employees from its global workforce and slash smaller clients in a bid to save the company. This could leave the door open for regional brokers.

The announcement came as the company's fourth quarter profits took the biggest battering in the company's history with a $676m loss.

The job cuts will come into force within six months and are expected to save the company $375m annually. Half the job loses are expected to come from outside the US.

Chief executive Michael Cherkasky told an analysts conference on Tuesday that smaller clients would be "phased out" by the end of the year. He said that the ban on market service agreement stopped certain clients from producing fair revenues, and as such would be dropped.

Cherkasky said existing clients would be forced to pay Marsh "fairly" and produce value for clients.

"Rate cards" would be produced and issued to insurers and clients setting out broker rates. He said it would signal a global rates rise.

The beleaguered broker also announced a 1% fall in its fourth quarter revenues, slashed to $3bn.

Market service revenues in risk and insurance services also plummeted in the fourth quarter by $220m, and $304m for 2004.

Bruce Carnegie-Brown, President and chief executive of Marsh's Europe/Middle East Operations said: "In the UK we have today entered into discussion with our staff consultative committee to determine, subject to consultation, how the proposed reduction may be undertaken in the UK and how many people this may affect.