The chairman of British Telecommunications called for calm yesterday ahead of a thorough review of BT's US merger partner MCI Communications Corp's strategy. BT, whose planned $20 billion merger was rocked last week by an unexpected profit warning from MCI, denied reports it was seeking two top-level resignations at America's second biggest long-distance carrier after last Thursday's surprise trading statement.

Instead, Sir Iain Vallance, BT's chairman, emphasised that BT would be working with MCI to decide how best to respond to what he called significant change in the US telecoms market. In a show of confidence, he also praised the US company's "courage and skill" in breaking into new markets.

"The important thing at the moment is to take time to look sensibly and thoroughly at the US market . . . be calm, analyse and act in shareholders' best interests," he told around 930 concerned shareholders at BT's annual meeting in Edinburgh.

BT also denied a Wall Street Journal report which said that under the merger terms any change in MCI's local US business would not qualify as a "material adverse" event which could prompt re-negotiation.