Employees of city accountants Andersen UK were reeling today after the company announced 1,500 job cuts.

The announcement came as the Chancellor made his Budget speech yesterday and sparked a fresh row over burying bad news.

The group blamed the knock-on effects of the Enron scandal and the economic slowdown for the move, which will affect more than a quarter of its staff.

A spokesman said partners were informed of the decision at lunchtime and it was then communicated down to staff.

He said it was unfortunate the move was then released into the public domain as the Chancellor began to address MPs in the House of Commons.

He said: "It was not intentional to distribute it during the Budget. It was to get information out to all parties at the earliest possible time."

But union bosses were furious with the timing of the cuts, and accused Andersen of burying bad news while the Chancellor was on his feet.

Roger Lyons, general secretary of Amicus, said: "This is an absolute disgrace. They are burying bad news on a big news day but they will not be able to bury it from their staff, whose morale will now be destroyed."

Andersen's UK office is due to merge with Deloitte & Touche under a tie-up announced a week ago.

The group's international operations have been splitting off from their US parent as it fights for its life.

The parent firm faces lawsuits and criminal investigations relating to its audit of Enron, the bankrupt energy giant.

Andersen UK has been struggling to keep hold of its clients in the wake of the Enron scandal and has already lost lucrative audit work.

Fund manager Amvescap, busmaker Mayflower and trains and bus group Stagecoach have all parted company with Andersen.