David Blunkett today said he hoped a reported £37bn pensions shortfall for the UK's biggest companies would not trigger bankruptcies or withdrawals from pension schemes.

Speaking during a visit to Nottingham East Midlands Airport, the work and pensions secretary said it was no surprise that research had revealed such a massive deficit faced by the UK's leading 100 firms. But trustees, he said, now had to strike the right balance between covering pension schemes and not putting investments at risk.

The shortfall faced by FTSE 100 companies with final salary pension schemes in July 2005 is £5bn less than it was 12 months earlier because of the continued recovery in equity markets, according to actuarial consultants Lane Clark & Peacock (LCP).

But LCP also found that the100 biggest UK companies paid out £39bn in dividends to shareholders in 2004 - almost four times more than the £10.5bn they paid into their final salary pension schemes. In that period, nearly half of FTSE 100 companies declared shareholder dividends worth £39bn, £2bn more than the £37bn pension funding shortfall they collectively face.

LCP warned the FTSE would have to rise from its current level of around 5,300 to more than 6,700 if the deficit was to be completely wiped out by next year.

"I don't think what's been revealed today is very surprising. It's why the regulator was established," said Mr Blunkett.

"And it's why the actuaries have been working over the last 12 months on this issue, and why training has been given to trustees, so they keep a balance between ensuring adequate cover for pensions for the future and at the same time not putting at risk the investment programme of those companies.

"What we don't want is to trigger bankruptcies or withdrawals from pension schemes because companies feel they have to make the balance up overnight."

LCP, which based its research on companies' 2004 annual reports, said six firms faced pension scheme funding shortfalls that were more than 30% of their market capitalisation. Overall, only three FTSE 100 companies with final salary pension schemes had funds that were in surplus under the accounting standard FRS17.

Companies paid a record £10.5bn into their pension schemes during 2004, with BT and Royal Bank of Scotland each contributing more than £1bn. Overall three-quarters of companies increased the amount they contributed to their schemes during 2004.