BT European head to resign

The head of BT Europe, Corrado Sciolla will be the most senior head yet to roll over the accounting scandal at BT. His resignation is expected later this afternoon.

The chief executive and chief operating officer of BT Italy have already been suspended and the company will examine whether any bonuses earned over the two-to-three year period over which major accounting irregularities have been detected should be clawed back.

The £530m hole in the accounts was a result of serious accounting errors involving staff and internal auditors that were missed by external auditors. The company is reviewing its relationship with its external auditor in Italy, PWC.

I'm told the position of BT Group chief executive Gavin Patterson is not under any immediate threat and sources at the company tell me they think today's 20% share price slide is an overreaction. Italy represents just 1% of BT's revenues.

The share price slump is primarily explained by a deteriorating outlook for BT's public sector business and market nervousness around both the impact of Brexit and uncertainty around the separation of BT Openreach - currently a matter of dispute between BT and the UK regulator Ofcom.

BT shares are currently down 19%.