The company is heavily in debt, and needed the approval of its banks before it could progress talks about swapping its debt for shares.

The banks, which are owed £1.8bn ($2.75bn), have agreed that formal discussions can now take place with the holders of bonds with a face value of £3.55bn.

The waiver was necessary because Telewest had been prevented from reaching any agreement with bondholders which would damage the lenders' prospects of getting their money back.

Long haul

Charles Burdick, the new chief executive, said at the beginning of this month that the company would be seeking the waiver.

Bankers said the fairly quick response to the his request indicated the confidence of Telewest's recovery prospects, despite wider concerns about the cable sector.

This is just the first step in what is likely to be a lengthy restructuring along the lines of rival cable firm NTL.

The two companies are widely expected to merge once they reduce their debts.

US media group Liberty Media, run by cable tycoon John Malone, has been touted as a possible buyer of both companies.

Shares in Telewest closed up 18% at 1.5p on Thursday, valuing the company at about 37 million pounds.