Struggling cable TV firm Telewest has said it will miss some debt repayments as it edges closer to a restructuring deal with creditors.

A company spokeswoman told BBC News Online that it had defaulted on bond interest payments worth £68.5m ($107m).

Telewest was due to pay the interest by the end of Thursday, and had warned previously at the end of September that it might default.

The firm is expected to miss another £12m in interest payments due by the end of Friday.

The default has prompted one of Telewest's creditors, the French bank Credit Agricole, to ask the courts to have the company wound down.

Talks on track

Telewest, which owes Credit Agricole £10.5m, said it would deal with the French bank's claim as part of its ongoing debt restructuring talks.

One official commented that the legal action was designed to put pressure on Telewest, amid talks with its lenders.

The company said it did not believe Credit Agricole's move would derail a proposed restructuring deal under which creditors would take control of 97% of the company, leaving just 3% for the current shareholders.

It is likely that the agreement would require the support of media mogul John Malone, owner of Liberty Media, who owns about 25% of Telewest's shares.

NTL example

The proposed debt for shares swap is similar to a restructuring deal agreed earlier this year by NTL, the UK's other large operator in the cable TV and telecommunications market.

Both companies borrowed heavily to fund the construction of their cable networks during the late 1990s, and found it increasingly difficult to repay their debts as the economy began to slow two years ago.

There has been speculation that the two firms, which operate in different franchise areas in the UK, could merge once they resolve their financial difficulties.

In the City, Telewest shares fell to 1.20p from 1.27p late on Thursday, down sharply from their March 2000 peak of 550p.