Cable & Wireless is looking for a new chairman after the surprise withdrawal of the man who had just been given the job.

In a statement to the London Stock Exchange, the telecoms group said it had held meetings with shareholders after unveiling a major shake-up - including 3,500 job cuts - and heavy financial losses.

"As a result of these discussions, David Nash, Chairman Designate and a non-executive director, has told the directors that he believes that, in the circumstances, it would be inappropriate for him to become Chairman at the start of 2003," said C&W.

C&W's board said it had decided it would be in the best interests of the company to find an external candidate for the job.

Shake-up

Mr Nash now plans to retire from the board at the end of this year.

But C&W said it has no plans to lose Chief Executive Graham Wallace, who faced criticism from shareholders after setting out the restructuring plan earlier this month.

"The position is that Graham remains chief executive," a company spokesman said. "The board believes he is the best person to lead the implementation of the restructuring."

C&W's decision to restructure and cut jobs earlier this month came after a review of its global business, which provides website hosting and telecoms services for companies.

Chief executive Graham Wallace has resisted calls to resign

It decided to cut 3,500 jobs in its global division, most of them outside the UK, reducing staff numbers to about 9,000.

Under the restructuring, the group plans to withdraw from much of the domestic business market in the US and Continental Europe but will continue to operate for multinational companies.

Cost cuts

The group is closing 23 of its 42 data centres around the world.

C&W Global's business in the UK is also being reshaped to cut costs.

The restructuring was designed to save about �400m ($635m) a year but will generate short term costs of approximately �800m.

C&W is also selling off non-core assets to raise funds.

The telecoms giant announced on Tuesday that it hopes to raise up to 273m Singapore dollars ($154; �99m) by selling two thirds of its stake in Singapore phone operator MobileOne.

Staying put

C&W chief executive Graham Wallace was widely seen as a likely boardroom casualty after the restructuring was unveiled.

"I have not thought about resigning, I have got a job to do here and I intend to do it," Mr Wallace told a news conference after detailing the restructuring.

C&W's share price closed down 3.75 pence, or 4.6%, at 77.75p.