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Cadbury Schweppes has played down rumours that the demerger of its US drinks arm will be scrapped, by declaring a 7 May deadline.

This will be the date when Dr Pepper Snapple will begin trading as a separate company on the New York Stock Exchange.

Shareholders will meet on 11 April to vote on the proposal.

The Dairy Milk and Bassett firm had planned to sell the drinks business, maker of Dr Pepper and 7Up, but changed its mind in the summer after the credit crunch hit the ability of potential buyers to raise finance.

Analysts at banking group Bear Stearns last week said the demerger may fail because Cadbury's may struggled to find the estimated £1.7 billion for the US drinks business to repay the plc company.

Shares in the group jumped by 4% to 563.5p on Tuesday morning.