BT enjoyed its best day on the stock market since the dotcom boom after its first woman boss pledged to cut £3bn of costs and reduce heavy investment in broadband upgrades.

Allison Kirkby, who took over as chief executive of the former state monopoly in February, vowed to make extra savings by the end of 2029 after the company hit a previous target year ahead of schedule.

BT had reached an “inflection point”, she said, as it crests the peak of multibillion-pound annual spending on its new full-fibre broadband network. The burden of the investment - expected to total £15bn - has weighed heavily on the company’s shares, which have traded close to pandemic lows in recent weeks.

Following Ms Kirkby’s maiden full-year results on Thursday, which also included a dividend boost, the shares surged as much as 18pc. It was the biggest intra-day rise since the height of the dotcom mania in 2000.

The upswing was a blow to short sellers, who have placed substantial bets against BT in the belief Ms Kirkby will struggle to tackle a long-standing malaise in its business divisions and face damaging market share losses in broadband as rivals build their own networks.

Earlier this week it emerged that several major investors, including hedge funds AKO Capital and Kintbury Capital as well as Canada Pension Plan Investment Board and BlackRock Investment Management, have placed a record £300m in positions  that would profit from falls in BT’s share price.

Ms Kirkby, a 56-year-old Glaswegian who entered the telecoms sector after 20 years at Procter & Gamble, hit back with plans to double the company’s cash flow to £3bn by the end of the decade and raised the full year payout to shareholders by 3.9pc to 8p per share. The company counts the French tycoon Patrick Drahi as its biggest shareholder with a stake of almost 25pc.

She signalled a renewed attempt to sell off or revive via partnership its international corporate business, formerly known as Global Services. Her predecessor Philip Jansen mounted an unsuccessful attempt to offload the declining business to private equity.

Ms Kirkby said: “We are sharpening our focus to be better for our customers and the country, by accelerating the modernisation of our operations, and by exploring options to optimise our global business.

“This will create a simpler BT Group, fully focused on connecting the UK, and well positioned to generate significant growth for all our stakeholders.”

Closer to home, BT has already outlined plans to cut 55,000 jobs by the end of the decade, with around a fifth of workers to be replaced by artificial intelligence.