But the results, revealed barely a month before the standard is published in draft form, also shows 'fat cat' company directors will continue to receive large share option packages despite the accounting effects.

A survey by Proshare, the employee share ownership lobbying group, reveals that if the standard was implemented, 40% of companies would be 'unlikely' or 'highly unlikely' to carry on with their all-employee option schemes. But 68% said they would continue to grant options to executives.

Some FTSE small cap companies told Proshare their pre-tax profits could be halved. Two in three respondents said they were against the proposals.

The average reduction in profits is expected to be 5%.

Alistair MacKenzie, FD of Jazz FM, is among corporate critics who say they would not have been able to reward staff with share options if they were to go on the p&l. Diane Hay, Proshare CE, said: 'It's a shame that because of the excesses of a few directors, everyone else is going to pay the price.'

Sir David Tweedie, chairman of the International Accounting Standards Board, is expected to issue plans on 7 November requiring companies to book shares as an expense. Technology companies like Logica and Xansa, are likely to be hit hardest.

Proshare wants the IASB to include an exemption in its proposals for all-employee schemes such as Sharesave. They are lobbying the European Commission as well as UK authorities.

Hay said: 'The UK government and the EC want to increase financial participation by employees. IASB proposals if adopted in their current guise go against this policy. We strongly urge the IASB to reconsider their position.'