Struggling cable company NTL may within hours announce a rescue deal representing one of the biggest bond defaults in corporate history, a report has said.

Details of NTL's progress in restructuring its $17bn of debt are set to be revealed on Tuesday when the UK-based firm files its 2001 annual return to US financial watchdogs.

But while bond investors are believed to be close to agreeing to swap their holdings for shares in NTL, banks are expected to take longer to strike a deal, the Financial Times said.

Bondholders with smaller stakes could also scupper the current survival effort.

Agreement is likely to see NTL reveal it is to place its US businesses into administration, the newspaper added.

Future hopes

Bondholders are expected to agree, in return for bonds, to gain 95% of NTL stock - leaving existing shareholders with a total stake of just 5%.

The deal will leave bondholders in control of the firm, in which they are expected to inject an initial $500m.

Many observers have high hopes for NTL in restructured form, believing the company has been undermined by its debt rather than failures in its business model.

NTL made a series of highly-priced acquisitions during the late 1990s technology boom.

Trend setter?

Some analysts believe a successful restructuring at NTL would encourage rival cable operator Telewest, which has about �5bn of debt, to follow suit.

Telewest said last month that it would not need to restructure its debt as long as it hit financial targets, but was discussing a number of options.

The firm, which provides television, telephone and internet access to private homes, says that its bundle of services is attracting more and more customers.