Stuart Valentine, ProShare's head of research, said: "They invented Sid in the first place and are giving the impression now that they are turning their back on him."
"Tell Sid" was core of the marketing campaign for British Gas's privatisation in 1986 but on Tuesday Richard Giordano, the chairman, said the share register had become too unwieldy and the company was looking at ways of slimming it down, perhaps with incentives for smaller holders to sell cheaply.
Mr Valentine acknowledged that British Gas Energy, one of the two quoted companies into which British Gas is to be split, might be a less appropriate vehicle for small shareholder investment than British Gas is now, because it will carry the liability for potentially loss-making gas-supply contracts. "That may not be the right sort of company for private investors," he said.
However, the British Gas move could accelerate a decline in private share ownership, which is thought to have shrunk over the last six months from the last recorded total of more than 10 million, partly because of the takeovers of electricity companies. But ProShare said demutualisation of building societies and insurance companies "might send it zooming up again".
With the City still undecided about the merits of the demerger plan, Moody's, the credit rating agency, delivered a blow with a statement that it was reviewing the British Gas for a possible downgrading.
A successful demerger would be a positive step but many hurdles remained, Moody's said. Renegotiation of British Gas's loss-making gas purchase contracts, to be held by the new supply business BGE, faced a far from certain outcome.
North Sea gas producers were expected to review their positions in the light of the transfer of the contracts to the supply arm. If the negotiations could be settled successfully without recourse to TransCo International, the pipeline company, or British Gas, it would have positive implications for the credit quality of the latter two organisations, Moody's said.
Meanwhile, independent gas suppliers that are to compete soon with British Gas in the domestic market said there were still questions over the demerger plan. Roger Turner of United Gas said he wondered whether the plan should have been taken further, by splitting the monopoly UK gas transmission business into two, making three entities altogether. "I don't relish the idea of Transco borrowing against transmission assets and blowing it all abroad," Mr Turner said.