The German government has reached an agreement to rescue Mobilcom, but the deal could still collapse if the failing mobile firm's main shareholder refuses to sign.

The economy ministry said it had enlisted German banks and France Telecom, a minority shareholder in Mobilcom, and that a bail-out could be launched with immediate effect.

But the plan still needs to be accepted by Gerhard Schmid, the company's former chairman, who together with his wife owns almost 50% of the firm.

Since the rescue plan would effectively wipe out Mr Schmid's management influence - a key demand of France Telecom - he continues to resist agreement.

Without that agreement, Mobilcom will have to file for insolvency within the next few days.

Entrenched positions

The proposed deal calls for France Telecom to assume Mobilcom's debts, and for an emergency loan of up to 100m euros (�64m; $100m) from banks and the government.

Mr Schmid wants his record wiped clean

The element of the plan being resisted by Mr Schmid is the need to put his and his wife's shareholding into the hands of a trustee.

Mr Schmid is demanding that, in return, the ministry drop its charges against his alleged abuse of a share bonus plan - something it has refused to do.

Mr Schmid's position is strengthened by the fact that France Telecom, which owns 28.5% of the firm, does not want it to file for insolvency, since that may invalidate the two companies' original cooperation framework agreement.

France Telecom, itself heavily indebted, withdrew support for Mobilcom in June, after Mr Schmid refused to cede it full control.

The German firm, which markets mobile services but does not own a network, built up more than 6.4bn euros of debt by investing in an expensive third-generation mobile licence and technology.