Embattled telecoms group Marconi said today it was still in talks with bondholders and banks over its long-awaited financial restructuring deal.

In a statement to the stock exchange, the group said negotiations were continuing with its creditors and further announcements would be made.

The statement came in reaction to mounting speculation that the firm had agreed a life-saving deal with its creditors.

The former Footsie star, which has been reduced to a shadow of its former self, is in the midst of negotiating a complex financial deal to resolve its massive debt problem.

Talks have dragged on far longer than expected, and led to increasing speculation about how little long-suffering shareholders will be left with.

Today Marconi confirmed for the first time that under the deal shareholders could be left with next to nothing.

It said it was envisaged existing shareholders would receive just 0.5 per cent of the share capital following the restructuring.

They would also receive warrants allowing them to buy 5 per cent of Marconi's shares, subject to certain criteria.

Shareholders have already seen nearly all the value of their investment wiped out in what has proven to be one of the sorriest sagas in British industry.

Shares at one point were worth more than £12 each, valuing the firm at almost £35 billion.

At yesterday's closing price shares were just 1.71p, giving the firm a value of below £50 million.

Under the deal Marconi is working on, a large amount of the group's debts would be swapped for equity, meaning the group would effectively be taken over by its banks and bondholders.

Marconi said today: "The prospective capital structure being discussed has been designed to provide flexibility for Marconi Group's ongoing success, maximise cash and overall recovery for creditors and allow existing Marconi shareholders to maintain an ongoing economic interest in the group."