The big four accounting firms will face a new threat to their dominance in the UK blue-chip audit market after Grant Thornton and RSM Robson Rhodes unveiled a bold merger plan to create the sector’s fifth biggest firm by revenue.

It is the biggest merger in UK accounting since PwC, the profession’s giant, was created in 1998 and comes as the stranglehold of the big four is under scrutiny owing to worries over its effect on fees, quality and financial stability.