The deal, which will see bondholders control a larger share of the NTL, ends months of speculation about the company's future, after interest payments on its burgeoning debt pile caused concerns about its future funding.
The restructuring of the company will leave all its operations intact and will see the company file for Chapter 11 bankruptcy protection.
Bondholders are also providing £348m to the company's operations in the UK and Ireland to keep it running during the Chapter 11 process and immediately afterwards.
NTL is among a number of European cable companies, including Telewest and United pan-European Communications, struggling under huge debts after investing billions of pounds building cable networks.
Delays to services and slower take-up of their offerings has seen many cable operators plunged into debt, while concerns about future funding have seen investors desert the sector.
Their problems have been exacerbated by the slump in the telecoms sector, which began in 2000 just as digital cable was launching, and by the advertising slowdown, which ultimately hurt all broadcasters.
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