CABLE company ntl yesterday announced it had gained approval from its banks to press on with a life-saving refinancing plan.

NTL is handing control of the business over to its bondholders in return for them forgiving £7.4bn of debt.

The debt is being converted into shares in two newly-formed companies, ntl UK and Ireland and ntl Euroco - the group's interests in mainland Europe.

Given the banks' approval, ntl's US parent will now file for bankruptcy protection while the courts supervise the restructuring process.

Chief executive Barclay Knapp said he expected ntl to re-emerge with the new structure by the end of the third quarter of the year in September.

The group's television, phone and internet services, which reach three million homes in the UK, including Darlington and Teesside, will continue uninterrupted in the meantime.

Mr Knapp said: "It's been a long and, at times, difficult process but I think we can take some comfort that we have reached an agreement quickly."

NTL unveiled the refinancing move last month after running up debts of more than £11bn through an acquisition spree at the height of the tech boom.

The company, which has all its operations in the UK, Ireland and Europe, was paying more in interest payments on the debt than it was earning.

NTL's bankers also hold part of the debt, as well as its largest shareholder France Telecom, which has also rubber-stamped the refinancing plan.

The problems at ntl have led to speculation that rival Telewest may also have to follow a similar path given its debts of £5.28bn.

Its finance director Charles Burdick rejected such a suggestion yesterday and said the group had enough funds to last for at least a further 15 months. Telewest yesterday announced, however, it was cutting 1,500 jobs to cut costs and push it towards profit.