By Gareth Corfield

Elon Musk has announced a new advert-free subscription for Twitter a week after 500 advertisers reportedly quit the social media website.

The billionaire said in a tweet on Sunday evening: “Ads are too frequent on Twitter and too big. Taking steps to address both in coming weeks.

“Also, there will be a higher priced subscription that allows zero ads”.

The announcement of the new subscription tier comes after 500 companies gave up on advertising with the website over the past three months.

Big spenders including Pfizer, Audi, Volkswagen, US foodstuffs giant General Mills and Cadbury’s owner Mondelez have all stopped advertising on Twitter.

Twitter’s business model depends on paid advertising. In its last annual accounts as a public company before the buyout completed, the social media company disclosed sales of $5.1bn (£4.1bn) for 2021.

Yet since Mr Musk took ownership of the website last October in a $44bn (£35bn) buyout, advertisers have fled amid a series of increasingly erratic decisions by its new owner.

Reports have suggested that Twitter has lost as much as 40pc of its revenues thanks to wary advertisers giving up on the website.

The world’s second richest man initially suggested he would appoint a content moderation council to make big decisions on reinstating banned users such as former US president Donald Trump.

Instead he made the decision personally after running a public Twitter poll asking the site’s users to vote on the question.

Mr Trump was permanently banned from Twitter after being accused of using the website to incite a riot at the US Capitol in January 2020.

A violent mob of Mr Trump’s supporters stormed the government building in the false belief that officials were trying to fraudulently declare his opponent as the winner of the presidential elections held in late 2019. Four people died in the mob’s wake.

Major advertisers began suspending their Twitter campaigns last year amid a sweeping round of job cuts and voluntary redundancies that saw the website shed around 5,000 of its 7,500-strong headcount.

The SpaceX and Tesla chief executive appears sensitive to criticism over Twitter’s reduced headcount, using Twitter itself to announce that the company now employs 2,300 people after a news report suggested the figure had dropped as low as 1,300.

Fears were expressed that among the redundancies were a large number of content moderators, who delete tweets that could harm advertising brands’ reputations.

Shortly afterwards a spate of fake accounts were set up by pranksters, including one that appeared to wipe billions of pounds from the value of pharmaceutical giant Eli Lilly.

The fake account was used to post a message in November saying its flagship product insulin would be made available free of charge.

The message was unusually convincing because the pranksters had spent $8 (£7) buying a blue tick, previously issued by Twitter staff as a verification mark.

Under Mr Musk, however, blue ticks are now available to anyone who pays.

Eli Lilly’s share price dropped 4.3pc immediately afterwards, despite the company using its own account to debunk the fake news.

Since the spoof account debacle, which also affected companies including Lockheed Martin and Nestle, Twitter has begun introducing differently-coloured ticks to distinguish between paid users, businesses and governments.