Phone leaks lead M&S to increase security around top executives

Marks & Spencer, which is fending off a proposed bid from entrepreneur Philip Green, has tightened security around its senior executives amid fears that their phone records are being leaked.

The timing of phone calls involving M&S chief executive Stuart Rose and Mr Green has been at the centre of investigations into trading in M&S shares before Mr Green's interest in bidding became public.

"We are concerned that information appears to be coming into the public domain which leads us to be concerned that some parties have access to phone records, Stuart's in particular," said a source inside M&S, without blaming the Green camp. "We have taken steps to tighten security around the bid team. There is quite a lot of sweeping going on."

Mr Green said: "It's complete rubbish. I have never engaged any investigators in any way shape or form in relation to M&S."

Mr Rose is under pressure for his dealings last month in M&S shares. Today he will be interviewed about them by the Financial Services Authority, which has launched an insider dealing investigation.

M&S hopes the regulator will expedite its inquiries to remove what it regards as a distraction from the business of restoring the retailer to health.

Yesterday, Mr Rose said he regretted buying 100,000 M&S shares five days before being told by Mr Green of his intention to make a bid.

He said in a BBC interview: "I think it's been an unnecessary distraction from the real issue... the ownership of one of Britain's major companies. If we all had the benefit of foresight we wouldn't sometimes do things." He bought the shares on May 7th shortly after taking a call from Mr Green to discuss meeting on May 12th. He said he did not know of Mr Green's plans until that meeting.

M&S said its board was "totally supportive" of Mr Rose.

Mr Paul Myners, chairman, added: "The facts are clear. When Stuart Rose acquired shares in M&S on May 7th, he did not know either that Philip Green would make a bid for M&S or that he would be asked by the company to become its chief executive.

"Stuart will not allow himself to be distracted from the task in hand, of maximising value for shareholders." Mr Rose also received support from M&S shareholders.

Mr Rose is understood to be discussing with his lawyers what steps to take against Goldman Sachs after the bank failed to retract remarks he claimed it had made about him.

In a letter to Goldman's chairman in Europe, Mr Peter Sutherland, Mr Rose accused the bank of making remarks to a weekend newspaper that were designed, "through promoting an untruth, to damage my reputation and in so doing to further your proposed offer for Marks and Spencer".

He alleged that Goldman had said he had told a client of the bank's - understood to be Bradford & Bingley finance director Rosemary Thorne - that he would be chairman of Mr Green's bid vehicle.

He had demanded a retraction by 5pm yesterday but had not received one.