Troubled health software company Isoft, which employs 300 people at its headquarters in Banbury, is to axe almost a quarter of its workforce.

The company confirmed about 150 of the 700-strong UK workforce would be made redundant, although a precise figure for Banbury was not available.

Spokesman Brian Hemming said: "Our preference is obviously to make the redundancies through natural wastage and voluntary redundancy."

Isoft has been plagued by concern over delays to a project to upgrade NHS computer systems and stock market speculation about financial problems.

Yesterday its share price plummeted by up to 31 per cent, after the group said annual profits would be up to £19m lower than expected because of a change in accounting policy.

The firm, which also said it was in talks with banks to change aspects of its banking facilities, said pre-tax profit for the year ended April 30 was likely to be between £3m and £7m, compared with its forecast of £17m to £22m under previous accounting rules.

Revenue is now expected to be between £195 and £200m, compared to £210-215m previously indicated.

Isoft said the fall in likely profit and revenue was due to a change in the way the group recognises its revenues from product licences and services.

Its problems put a question mark over the future of its NHS projects.

City analysts at brokerage Bridgewell said: "This remains the greatest area of uncertainty. While we would not expect Isoft to be kicked off the programme or fined, this is, of course, a possibility and will remain a concern."