Saying the case had focused on "narrow and arcane allegations", he said he was determined to clear his name even if meant going to the European Court of Human Rights.

Shares in Midlands-based aerospace group Rolls-Royce topped the London stock market yesterday after it said new accounting rules would help it to report better- than-expected profits in 2005.

The stock rose more than two per cent after Rolls said underlying pretax profits would come in "significantly ahead of market expectations" following its switch to International Financial Reporting Standards (IFRS).

Derby-based Rolls said the change would not affect its strategy, the management of its businesses or its cash flows. But it said its bottom-line pretax profits in 2004 would have been £ 58 million higher at £ 364 million under the regime.

Traders said Rolls was one of the few companies so far where the adoption of IFRS would benefit the group due to the nature of its contracts, many of which extend over several years. European regulations require Rolls-Royce to adopt the new accounting rules from 2005.

Rolls- Royce's shares closed at 2563/4p up 81/2p.