Who's in and who's out: the City picks its favourite business leaders of 2006

After a year when the City sprang back to life and the FTSE 100 touched highs not seen since the millennium bubble, most executives have not had to do much more than just hold on for the ride. Keen to expose those who went the extra mile, The Independent conducted a straw poll of analysts to find the City's businessperson of the year.

Against stiff competition in what has been a very busy 12 months for most blue chips, there was one name that leapt out from the crowd. Not for closing some transforming deal, or even for managing to conquer a new market. Surprisingly in a market that is peppered with foreign names and British plcs hoping to make it big abroad, the man in question was nominated for running a home-grown company that gets most of its revenues from the UK.

Lest that sound dull, the company is the biggest in its sector and barely three years ago had been written off as an also-ran that was unfixable in the public eye. Its shares have surged more than 45 per cent in the past 12 months, against a 12 per cent rise in the FTSE 100.

He is, of course, Stuart Rose, the chief executive of Marks & Spencer, and the brains behind a recovery that has captured the imagination not only of the City but also of retail investors - and shoppers - the length and breadth of the land.

Mark Charnock, retail analyst at Investec Securities, sums it up: "It has to be Stuart Rose. M&S was on its backside two years ago and to turn round a beast like that, which people were writing off, is a pretty good performance."

Eithne O'Leary, another retail watcher, at Oriel Securities, adds: "Stuart Rose, without qualification - he is the absolute standalone winner. He has reinvigorated a brand, built a fabulous team and executed a fabulous strategy."

And this from Richard Ratner, vice-chairman of Seymour Pierce and a man very close to Mr Rose's sometime foe Sir Philip Green. "He has done a very good job in a very difficult couple of seasons for the clothing boys. He still has a lot to prove, but he's done better than I thought and I take my hat off to him."

Some of the men Mr Rose beat in the retail sector, before going on to be nominated outright, included Justin King, who as the chief executive of J Sainsbury has transformed the supermarket chain's top line. Now he just has to follow through with the profits and 2007 could well turn out to be his year.

Charles Dunstone, the boss of Carphone Warehouse, was the top pick of Tony Shiret, at Credit Suisse, for "splitting open the broadband world" with Talk Talk.

Stepping away from the high street, the biggest achiever for many analysts in 2006 was Lakshmi Mittal for his spectacular multibillion-dollar takeover of Arcelor. He not only created the world's biggest steel company by far, his move was so threatening to rivals it has set off a train of consolidation in the sector.

Another favourite from the smoke-stack industries is Philippe Varin, the Frenchman who runs Corus. By common agreement, he's done a sensational job in restoring the Anglo-Dutch steel group to rude health, though he has had the following wind of a rising steel price. In so doing, he has set the company up for the present bid battle between Tata Steel of India and CSN of Brazil.

Another popular choice was Ben Verwaayen, BT's chief executive. Shares in the telecom group finally gained some headwind in 2006 as its investment in areas like broadband, IT services and its fledgling TV service started bearing fruit. The stock jumped 33 per cent on the year, surging to its highest price since the dotcom bubble burst.

Robert Grindle, at Dresdner Kleinwort, said: "Ben Verwaayen is a strong candidate for running a steady ship in difficult circumstances." Martin Mabbutt, an analyst at Nomura, said: "The evidence is finally there to prove what Ben Verwaayen has been doing and he is reaping the rewards. BT was very unloved, but now it is loved."

After Mr Verwaayen, the leftfield candidate for businessman of the year in the telecoms sector was Arun Sarin. The Vodafone chief executive entered the year in serious danger of losing his job amid reports of boardroom ructions and concern he was the wrong man to navigate a path through choppy waters for the mobile operator. Yet Mr Sarin survived. Damien Chew, at ING, said: "Arun Sarin has been to the brink of being fired and back. He was under immense pressure, but he has stayed while other board members have left. He has great survival skills."

From the world of financial services, Mr Rose faced the most competition from Michael Spencer, the chief executive of the broker Icap. One analyst, speaking off the record, said: "Just look at the way Icap has grown. This year, they bought the EBS trading platform and just seem to keep going from strength to strength. They barely put a foot wrong." Another added: "Icap just keeps growing and growing and growing."

There was a clutch of nominations for head banking honcho. Ian Gordon, at Dresdner Kleinwort, liked Phil Hodkinson, finance director of HBoS, because "he is a bit of an unsung hero but his command of his subject is unrivalled". Martin Cross, at Altium Securities, favoured Clara Furse, who runs the London Stock Exchange, "for the sheer growth in the company's share price". For Neil Shah, at Edison, RBS's Fred Goodwin deserved the prize "for sheer consistency". As for his overall winner, he tipped Steve Evans at the credit car hire company Accident Exchange. "We're very impressed with what we have seen of them, they are a company that is going places."

Another RBS man, Johnny Cameron, who heads the bank's corporate markets division, was picked as a "name to watch" by one unnamed analyst.

Sticking with the financial services sector, the boss of Royal & SunAlliance, Andy Haste, was a firm favourite with insurance analysts. Roger Hill, at UBS, said: "Mr Haste didn't start with the best set of cards, but he's managed to turn the business around by sticking at it. RSA is a completely different company to when he took it over."

From the leisure sphere, there were no serious contenders for overall business champion although the new man at Compass got a mention as did Peter Long at First Choice. Keith Bowman, at Hargreaves Lansdown, said Richard Cousins sprang to mind for his "positive start" at Compass. He is busy simplifying the group, to the delight of the City, which has marked the shares 25 per cent higher since Mr Cousins took the helm.

Meanwhile Mr Long stood out for "managing to grow the business while everyone else is having profit warnings" and his imminent sale of First Choice's mainstream business "for a very high multiple", according to one leisure analyst.

There were slim pickings from the pharmaceutical sector. Analysts opted out on the grounds none of the big firms had been doing very well. Chris Blackwell, at the biotech Vectura, was popular with one unnamed analyst, for "transforming it from a research-led biotech into a commercially-driven pharmaceutical development company".

There was more excitement in the media sector despite its bad year. Lorna Tilbian, of Numis Securities, suggested James Murdoch deserved the crown for his "audacious" swoop on ITV, when he bought an 18 per cent stake to block NTL's plans to buy the broadcaster. "It was vintage Murdoch. It really captured the collective imagination."

But with no clear leader among the big media companies, many analysts went for the heads of some of the smaller players. A number pointed to Nadhim Zahawi, joint chief executive of the polling and market research group YouGov. Alex de Groote, of Panmure Gordon, said: "He is a very buzzy, very commercial CEO. He has found a growth niche and created a branded product out of nothing."

In consumer goods, the most popular choice was Premier Foods' top man Robert Schofield. Graham Jones, also at Panmure Gordon, said of his swoop on Campbell's soup business and the Hovis maker RHM: "He has led significant consolidation in the UK food sector and we expect that to deliver earnings-per-share growth of 70 per cent."

But in every race there have to be losers. Had Sir Philip Green's companies been quoted, notwithstanding the knighthood he might have been in the running for the this year's wooden spoon, having overseen a collapse in sales and profits at Bhs and Arcadia even as M & S has surged forward.

As it was, the City's boo-boo prize goes to Lord Browne of Madingley, once routinely the winner of opinion polls such as this one. His has truly been an annus horribilis. From getting his marching orders at BP to having his company's reputation trashed in the US for the double-whammy of the Alaskan corroding pipe disaster following so soon after the deadly Texas oil refinery explosion, not in his worst nightmares could he have dreamt of such a challenging end to an otherwise sparkling career.

He has until the end of 2008 - when, 10 months after he will have turned 60, he's expected to be off - to get back on course. Few in the City rate his chances.