France Telecom posted the second-largest loss in French corporate history on Thursday, hit by the falling value of its investments in the shaky telecoms market.

The phone operator revealed a 10.2bn euro (�6.3bn; �9bn) write-down to cover the slump in value of stakes in cable group NTL and German mobile operator MobilCom.

The firm, which owns mobile phone operator Orange, has debts of about 65bn euros.

It has pledged to reduce its net debt to between 37bn and 47bn euros by the end of 2003 through the sale of some non-core assets.

Orange profits soar

Excluding the write down, France Telecom made a net profit of 1.9bn euros, with operating profit at 5.2bn euros, up from 4.86bn in 2000, largely driven by its Orange business.

Orange posted an 86% rise in core earnings on Thursday, with underlying pre-tax profit up 386m euros.

On Wednesday, it was reported that France Telecom was planning to sell its 26.6% stake in Wind - its joint venture with Italian utilities group Enel - as part of efforts to trim debts.

Both companies declined to comment on the reports.

It was also reported that France Telecom's German partner in MobilCom was attempting to exercise a so-called "put" option which it said allowed it to force the French firm to buy it out.

The report followed a public dispute between the two sides over capital investment and sale of shares in the company.