In a year that saw some of the world's biggest banks buckle under the strain of a deepening credit crisis, few investors would blame General Electric for shrinking its own finance arm.

Indeed, GE's shares surged by 14 per cent on Tuesday after executives revealed details of a plan to wean the company off its dependency on financial services for profit, while assuring its GE Capital division can prosper as what Michael Neal, the unit's chief executive officer, called a "well-funded, but smaller, business".

The retreat may rightly be hailed as an important step toward insulating GE from the worst of the downturn and assuring the conglomerate retains its pristine credit ratings, but it also escalates the pressure on the company's industrial businesses to deliver results in 2009, and possibly beyond.

Richard Lane, an analyst at Moody's, praised the actions taken by GE to reduce its reliance on financial services but warned that, unless GE Capital's contribution to group profits rebounds from 2010 onwards, the company's top-notch triple A credit rating could come under threat.

Among the steps GE is taking to shore up confidence in the financial arm's balance sheet is a plan to cut the dividend it pays to its corporate parent.

"If at some point in 2010 the company was not able to reinstate a meaningful dividend from GE Capital [to the parent], the rating could come under pressure," Mr Lane told the Financial Times.

The financial services arm expects to earn $5bn next year, down from $9bn in 2008. While GE will not share its forecast for total profit until later this month, GE Capital's shortfall all but assures the conglomerate will post its second straight annual profit decline. Wall Street is already betting that way.

"Is there anyone out there forecasting our profits will be level in 2009?" Keith Sherin, GE's chief financial officer, asked. "I haven't seen it."

GE Capital should begin to produce double-digit earnings growth in 2010, the company said.

The division's emergence as a profit engine during the 1980s and 1990s lifted its corporate parent - already among the world's most-respected companies - to new heights, made former chief executive Jack Welch a management legend. It also helped to assure GE would meet its earnings targets even as economic turbulence stifled results at other divisions.

The steady growth produced by its infrastructure and media units has helped GE hold on to its triple A debt rating, keeping borrowing costs low.

The financial arm could, in turn, then lend those funds to consumers and corporations at a profit.

GE has no plans to sever the symbiotic relationships its managers have spent the past three decades cultivating.

Besides, company executives argue, their products are the envy of the industrial world. Their businesses, they say, are poised to benefit from some of the global economy's most sweeping trends, from an ageing population to the widespread adoption of renewable energy sources.

GE may continue to benefit from its prescient investments in businesses that serve the oil and gas, alternative energy, water, aviation and transportation industries, fulfilling the company's goal of generating at least 60 per cent of earnings from its nonfinancial divisions.

The decision to recoil from financial services may be an obvious one in 2008, and probably next year, too. But what happens if the world's economy needs more time to recover from the downturn, delaying lucrative infrastructure projects expected to fuel results at GE's industrial businesses?

The letdown may lead many of the same investors who had welcomed a smaller GE Capital to clamour for its revival in the not too distant future.