REPORTS that QinetiQ is to be floated on the Stock Exchange by the end of the year have been dismissed as pure speculation.

Several national newspapers carried articles at the start of this week saying the QinetiQ sell-off was one of the priorities of the newly re-elected government.

QinetiQ, Malvern's biggest employer with some 2,500 staff, was created in 2001 from the government's Defence Research and Evaluation Agency.

In 2002, the Carlyle Group, one of the world's largest private investment firms, acquired a 33.8 per cent stake in the firm.

The MoD kept 62.5 per cent, but said this shareholding would eventually be sold off.

Yesterday, an MoD spokesman said: "It's always been our intention to float our share but this business about the end of the year is pure speculation by the newspapers."