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LONDON (Brand Republic) - AOL Time Warner is in talks with UK cable operator NTL in a deal that could see the US media and internet giant’s content carried on NTL’s pan-European high-speed cable network.

The agreement would give AOL distribution to NTL’s 8.5m UK customers and 20m European customers. The partners would share revenues derived from broadband customers in the UK, Germany, France, Switzerland and Sweden.

AOL is reported to be keen to expand its international business before the downturn in the US economy affects its advertising revenues. The group reported an increase in revenues for the first quarter of 2001 earlier this month, despite the slowing US economy.

According to a report in the New York Times, AOL first approached beleaguered telecoms giant BT about a distribution deal but the talks failed to progress.

The deal comes at a sensitive time for NTL, which has come out on top of a list, compiled by City analysts, of telecoms firms facing bankruptcy.

HSBC said the combination of high losses, huge debt burdens and unstoppable spending plans spells disaster down the line for equity holders. The analysts also said that NTL rival Telewest scored badly and both companies were rated as not viable.

However, an analyst from HSBC said that, although NTL revenues are dwarfed by debts of £9bn and it is being supported by a £1bn loan from Morgan Stanley, he did not think it would go under. He added that the company needed to do something drastic such as a major rights issue.

GE Capital Bank, which issued $388m (£270.87m) of fresh funds to NTL on Friday, said it believed the cable operator was one of the best-positioned in Europe. It said that the convertible bond that provides $100m (£69.81m) of the new money assumes a recovery in NTL’s share price.