In a federal court in Manhattan yesterday, Myers pleaded guilty to the false filing of documents with securities regulators, conspiracy to commit fraud and securities fraud.

Myers told the judge: 'I was instructed on a quarterly basis by senior management to ensure that entries were made to falsify WorldCom's books to reduce WorldCom's reported actual costs therefore increasing reported earnings.'

He said accounting changes were made 'for which I knew there was no justification or documentation'.

This will be seen as a major victory for prosecutors who are arguing that a conspiracy at WorldCom allowed the company to inflate its earnings by $5bn (£3.2bn) over an 18-month period. Myers guilty plea is seen as a potential means to link other senior executives to the alleged fraud.

WorldCom has already restated its accounts three times, the most recent being a $2bn restatement made last week, taking the total amount to $9.1bn.

Myers' admission of guilt carries with it the prospect of a maximum jail term of 20 years, plus a fine of $1.5m, although it rumoured his cooperation with prosecutors may lessen his sentence.

WorldCom became the largest corporate failure in US history when it filed for bankruptcy in July.

Earlier this month WorldCom's former chief financial officer Scott Sullivan pleaded not guilty to fraud charges.