The Chinese threat not to continue Google’s licence to operate in the country has put it on the brink of being barred completely from the world’s most populous internet market and could eventually jeopardise its position as the world’s leading online advertising company, according to internet executives and other observers yesterday.

Without a licence Google would be forced to shut down its operations in the country, which include music, maps and translation services, according to officials at the internet company. Google has about 350 engineers in China and 500 employees in total, said a person familiar with the company’s operations there. Should it lose its licence, many of its most talented people would be likely to move quickly to jobs elsewhere, this person said.

“In the first half of this year, there was no more than psychological fallout from Google’s stand-off with the government, but this time, the impact will be real, and it will be big,” said Edward Yu, chief executive of Analysys, a Beijing-based internet research firm.