"You don't understand," said the wannabe internet entrepreneur to the banker he was tapping for cash. "This is not about performance, it is about a concept. If we started executing the plan, it would lose its purity and investors wouldn't be interested."

According to the league table of the UK's biggest 500 companies by market value, investors have lost interest in technology and telecoms shares in a big way.

Over the past 12 months the Techmark index of technology shares has fallen by almost 30 per cent, forcing many former UK 500 stars to quit the league table, as investors sought safer havens than over-hyped internet stocks or debt-laden telecoms groups.

QXL, the online auctioneer valued at £2.5bn at its peak in March 2000 and ranked 147th last year, was the most prominent exit, if corporate activity is excluded as the cause of departure. It was followed out by other faded celebrities, 365 Corporation, Affinity Internet and Redstone Telecom.

Durlacher, the technology-focused investment bank once trumpeted as a standard bearer for the new economy in the UK, also dropped out of sight. Ranked at 199 a year ago, and a contender for FTSE100 status at the height of the internet boom, the company has seen its shares tumble 97 per cent since February last year.

Of the 10 companies showing the biggest fall in market value over the last year, eight were technology or telecoms companies, including Freeserve and Thus, which both made highly respectable debuts into the UK 500 in 2000. Thus saw its ranking drop 214 places to 316 while Freeserve, the internet portal sold last year to France Telecom's Wanadoo business, fell 107 places to 174. Thus shares, even after a recent sharp rally, are languishing 93 per cent lower than in March last year.

Atlantic Telecom, the alternative telecoms group that has been plagued by funding fears, fell furthest from grace, down 255 places to 428. Eidos, the computer games group best known for the pixel pin-up, Lara Croft, blamed interminable delays to the launch of Sony's Playstation 2 for its woes and dropped 225 places to 417.

Apart from these casualties, there were some old economy companies that simply could hold on no longer.

Cammell Laird, the ship builder, was forced from its position at 364 and has since gone into receivership. Storehouse, last year at 492, was finally pushed out after selling off its department store chain BhS to Philip Green, the entrepreneur, and renaming itself Mothercare.

But perhaps the most telling symbol of investor disillusionment is British Telecommunications, once Britain's second largest company by market value after BP. This year the troubled utility is ranked ninth, while its arch rival Vodafone has moved up from third place to take the top spot. Since the rankings were compiled on January 4, BT's shares have fallen even further as it struggled to present a coherent plan to reduce its £30bn debt.

Mergers and takeovers accounted for some of the biggest moves among the top 10 companies. Glaxo Wellcome's merger with SmithKline Beecham left the merged entity as the UK's third biggest company, according to the table, with a market value of £109bn. Royal Bank of Scotland's acquisition of National Westminster propelled the Scottish bank from a lowly 34 to seventh place.

But investors' aversion to new economy shares also helped banks in general, leaving four banks in the top 10 against just two last year. According to a report on market trends by Charterhouse Securities, the banks have enjoyed "almost unprecedented relative strength" over the past nine months as a result of the sell-off in technology and telecoms shares.

Banks topped the sector league table, with a combined market value of £277.7bn for the 12 companies, against £222.8bn last time.

Yet, the list of the biggest risers in the UK 500 does not show any coherent pattern of investment. Companies in sectors as diverse as biotechnology and leisure, logistics and property moved up the rankings.

Oxford Glycosciences was the biggest beneficiary, moving firmly into the UK 500 from its position at 495 to 203, amid the investment euphoria surrounding research into proteins. But the company is still incurring losses.

Luminar, which acquired Northern Leisure last year, was the second biggest gainer, jumping 195 places to 254. In part, it has benefited from the wider popularity of leisure shares, which has seen the sector rank ninth in terms of market value at £41.5bn.

Finally, this year will be a testing one for many of the UK 500's newcomers.

Companies such as Autonomy, the internet software group which debuted at 130 and Bookham Technology - a new entrant at 158 - are facing a severe slowdown in core markets in the US and Europe and their shares are trading significantly lower than the beginning of the year.

But even for old economy UK 500 stalwarts such as Mayflower, the bus and truck manufacturer which tumbled from 259th place to 444th, prospects of an economic slowdown could make it more difficult to stay in the 500 club.