Carl Icahn, the billionaire activist shareholder, succeeded today in a first step to force the break-up of Motorola after the mobile phone giant said that it would float off its handset unit.

It is not yet clear whether Mr Icahn, who is Motorola's second-biggest shareholder, with a 6.3 per cent stake, will succeed in appointing his own chief executive, Keith Meister, at the head of the newly spun-off business.

Mr Meister runs Mr Icahn's own $8 billion (£4 billion) investment fund. This week Mr Icahn said: ''We're not interested unless Meister is on there.''

Greg Brown, the Motorola chief executive, would say today only that the company had begun a search to recruit a new leader for the handset business.

Motorola is the world's third-biggest mobile phone handset maker, behind Nokia and Samsung.

Its market share and stock price have tumbled over the past year after the group failed to produce another handset to match its best-selling Razr phone.

The company sold 12.2 per cent of all mobile phones worldwide in the last quarter of 2007, compared with 40 per cent for Nokia and 14 per cent for Samsung, according to IDC, the technology data specialist.

Mr Icahn has been agitating for change at Motorola for the past 18 months and succeeded in ousting Ed Zander, its chief executive, in January and forcing the board to conduct a strategic review.

But he increased pressure on Motorola on Monday when he sued the company in a Delaware court demanding to have access to minutes of board discussions about the potential spin-off and the unit's performance.

Motorola said today that it hoped the division of the company could be completed by next year.

The demerger would see the handset business in one group and the company's network operations in another.

Mr Icahn has argued that the stock market has not valued the handset business, which is embedded with other different businesses, and that the division needs to be restructured completely.

Motorola is lagging behind its rivals in 3G technology. Its share of the 3G mobile handset market is 1.4 per cent, trailing Nokia's 36 per cent and Sony-Ericsson's 21 per cent, according to IDC.

Shares in the group have fallen 63 per cent since October 2006, when investors started to become disillusioned with its results.

In pre-market trading today, they rallied 10 per cent.

Mr Icahn, who has forced significant change at a number of companies, including BEA Systems, is unlikely to be satisfied with a demerger of Motorola alone.

Alongside insisting that he appoint his own chief executive, Mr Icahn may seek the removal of Mr Brown, whose abilities he has questioned publicly.

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