France Telecom is planning to tackle its immense debts with a wide-ranging cost-cutting plan which will eat into its planned spending on advanced mobile phone services, reports say.

After two days of sharp stock market gains which boosted the company's share by 27%, Friday brought newspaper speculation that the company's third-generation mobile rollout programme is first in line for the chop.

Market speculation has already suggested that a 9bn euro (�5.8bn; $8.9bn) government loan and 5bn euros in new bonds are part of the package.

The company has denied separate reports that it is also planning to lay off 45,000 workers in an attempt to cut costs.

France Telecom is expected to provide full details after the company's board meets on 4 December.

Thursday's share price rise built on gains earlier this week after France Telecom extracted itself from a costly partnership with German mobile operator Mobilcom.

Return to health

France Telecom stock, weighed down by concerns over its 70bn euro debt pile, has plummeted in recent months.

Even allowing for the recent recovery, France Telecom shares are down by nearly 60% since the beginning of the year.

The company went on a costly acquisition spree during the boom years of the 1990s in an attempt to build up a global presence.

The subsequent collapse of telecom company valuations as the technology bubble began to burst put the firm under severe financial pressure.

The French government, which still owns 55% of France Telecom, is expected to play a major role in restoring the firm's finances.