One of America's most high profile investors has taken a $3.5bn (£2.74bn) chunk out of Nestlé and called for a shake-up of the firm.

Dan Loeb's Third Point hedge fund now holds 40m Nestle shares, amounting to 1.3 per cent of the group.

It will now petition for chief executive Mark Schneider to implement a "bold action plan" for the Swiss giant.

Nestlé has a factory in Dalston which employs 330 people and has been on the outskirts of the village since 1952.

It processes 65m litres of milk each year and almost 1bn sachets of Nescafé Café Menu products.

In a letter to Nestlé's board, Third Point said: "We feel strongly that in order to succeed, Dr Schneider will need to articulate a decisive and bold action plan that addresses the staid culture and tendency towards incrementalism that has typified the company's prior leadership and resulted in its long-term under-performance."

Among its demands the fund wants Nestlé, which is also behind Cheerios and Kit Kats, to offload its 23 per cent holding in cosmetics giant L'Oreal and to adopt formal profit targets.

The news sent Nestlé shares to a record high after they rose more than four per cent in Zurich to 85.8 Swiss francs (£69) each.

"We believe our recommendations to Nestlé management, if taken together, would dramatically improve both the growth profile and earnings power of the company," Third Point added.

Mr Schneider was drafted in earlier this year and is embarking on an overhaul aimed at boosting sales and profits.

Nestlé's British corporate headquarters are located near Gatwick, and the firm has a global research centre in York.

As well as Dalston, it has plants in Newcastle, Halifax, Girvan and Tutbury, as well as York, while its pet care sites include operations in Liverpool, Wisbech and Sudbury.

Russ Mould, investment director at AJ Bell, said: "Whether management and staff at any of these sites, or the Gatwick HQ, are affected by Third Point's call for greater efficiency and asset sales remains to be seen and will again initially depend on how Nestlé's board in Vevey, near Geneva, responds to Third Point's list of proposals."