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Key D'Arcy staff and clients will be absorbed into the group's three other networks - Publicis, Leo Burnett and Saatchi & Saatchi. Publicis chiefs have acknowledged that job losses are inevitable among the 6,000 D'Arcy staff working across 72 countries.

At the same time, a potential conflict problem is being headed off with the establishment of a new agency in Detroit to take on D'Arcy's General Motors business in the US.

The car giant, a D'Arcy client since 1914, can't be accommodated by either of the other group operations, which number Renault, Fiat and Toyota among their clients.

However, the future of D'Arcy's core Procter & Gamble assignments is less clear, with group networks likely to be jockeying for a share of the world's biggest advertiser, 75 per cent of whose business is handled by Publicis-owned networks.

A merger of the D'Arcy and Publicis operations in the US, giving the Publicis network the strong New York office it lacks, means P&G and L'Oreal will share a single agency. However, because D'Arcy's P&G business comprises cleaning and paper products rather than haircare, this is not seen to be a problem.

Elsewhere, P&G business is likely to be reassigned according to clients' local needs. "P&G was consulted even before the Bcom3 deal was done and has been very supportive," a senior Publicis executive said.

The move has also precipitated change at the top of the Publicis network where Maurice Levy, the chairman, is relinquishing day-to-day control of the network to Rick Bendel in order to devote more time to the burgeoning Publicis Groupe.

Bendel, the regional chairman for the UK and the Nordic region, is being promoted to chief operating officer. As the first non-Frenchman to lead the network in its 75-year history, he is expected to sustain relationships with some of the network's newest clients, including Hewlett-Packard and Allied Domecq, leaving Levy as the key contact on long-standing European relationships with Renault, Nestle and L'Oreal.

Bendel, who arrived at the Publicis London agency when it acquired Geers Gross in 1991, has built a reputation as a tough operator within the network.

"He's Levy's enforcer," a Publicis source said. "Not only is he good at dealing with trouble spots but sees Levy as a father figure."

The decision to shut down D'Arcy comes in the wake of serious recent setbacks including the loss of P&G's Pampers account in the US and its place on the Mars global roster. The sacking wiped £76 million off its billings.

"Our initial intention was to keep D'Arcy but recent events caused us to think differently," Levy said. "Changes in the market have made it less competitive and it has the smallest global coverage of any of our networks. We have other more important priorities rather than investing in a fourth network."

The biggest surprise in the management fall-out from D'Arcy is in the jobs offered to Susan Gianinno, the head of its US operations, and John Farrell, the worldwide president and chief executive.

Gianinno will run what will be a substantial unit created by the merger of the Publicis and D'Arcy operations in the US, and Farrell has been asked to take charge of the Publicis group's global marketing services offering. "It's not what we would have expected," a D'Arcy source said.

But Levy insisted: "It's not a snub to John. He has a unique experience in marketing services, an area in which we want to develop much more aggressively. The job is real."

Lee Garfinkel, D'Arcy's chief creative officer, has been offered a post as the Publicis network's first worldwide creative director. His brief is to raise its profile to match the calibre of its multinational clients.

"I tried to hire Lee when he left Lowe for D'Arcy but he was already committed," Levy said. "Although we didn't buy Bcom3 just to get Lee, we did want him badly."