±±¾©Èü³µpk10

In the past, NTL and Telewest have persistently denied speculation that they would combine, saying that their vast debt mountains prevented it.

However, NTL yesterday received approval from bank lenders to reduce its debt by £7.4bn in a debt-for-equity swap with bondholders, including its biggest shareholder France Telecom.

NTL chief executive Barclay Knapp said that once the company had completed its restructuring, it would re-examine plans for a merger with Telewest.

Knapp's comments were echoed by Telewest finance director Charles Burdick, who admitted that the prospect of a single UK cable operator with almost 5m customers to compete with BT and BSkyB was an attractive one.

He said: "The world's just going to get tougher and having the one cable company competing with BT and Sky in all product areas is really what makes the best sense for the customer and the best industrial logic."

Telewest is also understood to be planning a similar deal to NTL's reduces its £5.5bn debt. The company has sufficient funding to last 15 months, but it is unlikely that it can raise enough from the sale of assets such as content arm Flextech, the value of which has plunged to £500m from £2.2bn in 2000, to survive.

Once NTL's restructuring is complete it should be left with about £4bn in debt. The City is thought to be looking for Telewest to reduce its debt by at least £3bn.

However, the debt issue has been overshadowed by yesterday's announcement that Telewest is to cut 1,500 jobs and reduce capital expenditure.

If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the .