The statement thought to have been forced on the company by the Stock Exchange was intended to stem a

The statement, thought to have been forced on the company by the Stock Exchange, was intended to stem a stream of selling pressure that has wiped away three- quarters of the value of Trafalgar since the beginning of the year.Much of the recent speculation has focused on Trafalgar's ability to pay dividends on both its ordinary and convertible preference shares. Analysts warned that a rumoured disposal of the line, which owns the QE2, would achieve nothing if, as expected, it failed to achieve the value at which the business is quoted in Trafalgar's books.As expected, the troubled shipping, engineering and construction conglomerate responded to a recent flurry of market rumours about its financial viability by issuing a statement confirming the support of Hongkong Land, the Jardine Matheson associate that took a 26 per cent stake in 1992. The shares fell sharply to a low of 17p as the market dismissed an assurance from the company that it retained the support of its largest shareholder, Hongkong Land, but quickly recovered ground as bargain-hunters moved into the market.Speculation turned to the future of Cunard, the loss-making shipping line that is now Trafalgar's only reasonably well known asset following the disposal two weeks ago of the Ritz hotel for pounds 75m. TOM STEVENSON Deputy City Editor Almost 30 million Trafalgar House shares changed hands yesterday, the second day of heavy volumes, as the former Footsie stock became "the best punt in the market" according to one dealer. "It may be regarded as unfair but that is opening up a different argument over whether the tax benefit is just. It is a general point and has nothing to do with the National Grid," he said.The flotation of the grid has been dogged by controversy, with government and industry wrangling for months over the details.

Last month it was announced that customers would receive a pounds 50 rebate after the flotation in spite of strong opposition from the regional firms.The pounds 50 rebate, although regarded by ministers as a triumph, was marred by an embarrassing row over "fat cats" in the privatised utilities after grid directors resisted ministerial pressure to waive their share of the special dividends.David Jefferies, chairman of the National Grid Company, stands to make pounds 190,000 from the dividend payable on his shares while three other directors will get payments of pounds 125,000 between them.Their decision to take the profit is known to have incensed Tim Eggar, Minister for Energy and Industry, and also angered executives in some of the 12 regional firms.A spokesman for National Grid said that 500 individuals below board level in the company also owned shares and "are legally entitled to the dividend".Mr Jefferies said recently that he felt "no guilt whatsoever" about his expected gains, adding: "I feel simply that what I choose to do with the money will be my decision."He said he felt "very strongly" that the freedom of the individual shareholder was at stake.. The plan was plunged into controversy yet again last weekend after it emerged that electricity executives who have shares and share options in the 12 regional firms stand to make millions of pounds when the grid is floated.One Whitehall source said the tax issue had nothing to do with the grid sale per se. The flotation is to be accomplished by passing these shares pro rata to shareholders in the Recs.The tax issue is sure to enrage many private shareholders, who as normal taxpayers will not be able to benefit in the same way as the big City pension funds.The flotation of the grid will take the form of allocation of the shares held by the 12 companies to their existing shareholders. By contrast, big City institutions will be able to claim a tax credit from the Exchequer.The National Grid is owned by the 12 regional electricity companies in England and Wales. That means that private investors will have to pay tax on the shares regardless of whether they sell them.

MARY FAGAN and JEREMY WARNER A row is brewing over the tax treatment of shares in the pounds 3bn National Grid flotation, with small private shareholders expected to lose out heavily and the big tax-exempt pension funds reaping rich rewards.The Inland Revenue has determined that the distribution of National Grid shares, details of which are to be announced today, will be treated for tax purposes as a dividend payment. "This way, I'll be able to tell my grandchildren that I bought dinner for Gorbachev," he said.Who knows what he would have thought of Pocahontas, but Benito Mussolini was mad about Mickey Mouse, reports his son Romano. Mr Mussolini said his father sang Disney songs and thought Snow White and the Seven Dwarfs was such a masterpiece that he wanted to see it again and again. The dictator met Walt Disney in 1935, his son said: "He took him to Villa Torlonia [his residence] and they talked about Mickey Mouse, Minnie and Donald Duck.''. The policeman who fetched a bucket of Original Recipe for six declined reimbursement. "This is America."After another 30 minutes, the trousers were back and Mr Gorbachev emerged triumphant.

After the lecture, the peckish ex-Soviet leader wanted some Kentucky Fried Chicken. When the trousers didn't reappear, and his speech was due to begin, the Secret Service was pressed into service to investigate. At one point, a nervous Mr Gorbachev asked his interpreter if he could borrow his trousers "Why wear any?" he replied. While the Andrew Lloyd Webber musical portrays Evita as a corrupt populist who slept her way to power, the Argentine film will paint her as a champion of the masses, the saint she is to many of her compatriots."Evita was a pioneering feminist, not the prostitute others would have you believe," protested Victor Bo, the Argentine film's producer. Mr Lloyd Webber found her "easily the most unpleasant character I've written about''.On his recent US lecture tour, Mikhail Gorbachev wasn't sleepless in Seattle but trouserless in Louisville. After getting caught in the rain, Mr Gorbachev sent his trousers out to be pressed while he waited in a hotel bathrobe.