Buildings material company Cape has promised to pay its former asbestos miners in South Africa compensation following a threat of fresh legal action.

London-listed Cape said it hoped to pay the first instalment of an out-of-court settlement to miners suffering asbestos-related illnesses soon.

We have got further discussions with Cape's banks...and we hope to make the first instalment soon

Paul Sellers Cape chairman

Cape Chairman Paul Sellars told BBC News Online he could not guarantee the payment would be made before a 14 September deadline set by the miners' lawyers.

The company reached a deal in December to pay £21m to 7,500 South African miners for asbestos-related diseases they contracted in the 1970s.

The first instalment of £11m was due at the end of June and the company has already had two extensions.

More than 300 miners have died of asbestosis since 1999, when they first launched the action against Cape, the miners lawyer Richard Meeran said.

On Tuesday, Mr Meeran said they would withdraw from the out-of-court settlement and initiate new legal proceedings if Cape did not pay by 14 September.

Restructuring deal

Mr Sellars said the company was committed to the settlement, but that the sale of some business units to fund it had taken longer than expected.

"It's not easy selling a loss-making business and we are working with Cape's banks," he said.

The first stage of restructuring - the sale of the manufacturing business - is expected to be complete next week but the sale of the industrial services division is taking longer, Mr Sellars said.

He would not comment on Mr Meeran's claims that Cape's bankers, Barclays and Royal Bank of Scotland, were resisting lending them money against their assets.

"It would be wrong for me to comment on where we are with our banks," he said.

New legal action could see Cape's former parent company, UK-based Charter, and South African holding company Gencor drawn into the litigation, Mr Meeran warned.