MyTravel is seeking financial shelter

City lenders have voted in favour of allowing the firm to delay paying back �222m of debt due in 2004.

MyTravel plunged into trouble last year after issuing three profit warnings and uncovering a 'black hole' in its accounts.

The company has also seen business hit by the war in Iraq and the Sars virus.

In June this year, MyTravel struck a �1.3bn financing deal which it hoped would give it time to restructure the business.

Now bondholders have agreed to extend the maturity of �221.6m of bonds which were due to mature next year to January 2007.

Catalogue of woe

In April, MyTravel said it was cutting 2,000 jobs after what it described as its worst year ever.

The firm, which is based in Rochdale, Greater Manchester, uncovered a gaping hole in its balance sheet in 2002, which meant profits came in much lower than expected.

Chief executive Tim Byrne quit in October after two profit warnings and a sharp fall in the company's value, and founder and chairman David Crossland left the firm in February.

The company were then confronted with a downturn in business as the war in Iraq and outbreak of the deadly Sars virus led to fewer travellers.

Last month, the firm said corporate rescue specialist John Darlington had been appointed as its new finance director.

Mr Darlington replaced Kazia Kantor who had only been in the job nine months but had overseen the refinancing deal.