The consulting industry faces 'cannibalism' as it struggles to find the next generation of capable staff, Ernst & Young's head of advisory Steve Varley has warned.

Laying out an aggressive expansion plan to bring E &Y's 400-staffed advisory business up to 1,000 by 2010, Varley said that the firm would recruit the best staff from existing players, such as the other Big Four firms, large scale IT services businesses and experts in industry. It will also introduce a rigorous training regime for graduates and trainees.

The sale of accounting firms' consulting arms and consolidation were the main factors in the lack of fresh blood. 'There's an imbalance between supply and demand,' said Varley. 'E&Y is looking to get great at building new consultants.'

Varley's comments may worry other big players in the market, which have already seen aggressive poaching from the Big Four.

Consulting has an increased focus for the Big Four firms, which have moved back into the advisory space following the end of non-compete agreements struck with the IT services giants after the sell-off of Big Four consulting arms.

E&Y's ambitious plans follow similar goals at KPMG Europe. Aidan Brennan, head of performance consulting at KPMG Europe, said that, over the next three years, the firm was looking to grow headcount from 1,000 to 1,800, and double revenues to more than £400m.