Tesco will face additional long term pain after the British grocer revealed that it overstated its expected profits for the six months to 23 August 2014 by an estimated £250m, due to an accounting error.

Markets have since been selling off the stock in droves and the Tesco stock price plummeted by 11% in early trading to around 209.00p.

Traders have also remarked that they have "lost patience" over Tesco's problems and have decided to plough in their cash elsewhere, leading to the retailer's stock hitting 11 year lows.

"Tesco is no longer a viable investment," said Marc Kimsey, Senior Trader at Accendo Markets.

"Traders are clearing the books of all holdings and reallocating funds in sector peers. The last two years have tested investors' patience but with the dividend being cut back and today's revelation, justification to hold is non-existent."

Another trader said:

All eyes will be on newly installed CEO, Dave Lewis, after he was parachuted in a month ahead of schedule on 1 September.

"We have uncovered a serious issue and have responded accordingly. The chairman and I have acted quickly to establish a comprehensive independent investigation," said CEO Dave Lewis.

"The Board, my colleagues, our customers and I expect Tesco to operate with integrity and transparency and we will take decisive action as the results of the investigation become clear."

Two weeks ago Tesco cut its full-year profit forecast to £2.4bn (€3.1bn, $3.9bn) from £2.8bn and slashed its dividend by 75% citing "challenging trading conditions".