CABLE firm ntl is looking to pay off a large wedge of its debts in an effort to save itself a whopping £55m interest bill.

As part of an enormous debt restructuring exercise, the struggling company negotiated $558m (£350m) of high-cost senior secured notes at an interest rate of 19 per cent.

The interest is due on the loan from next January, but if ntl can re-finance it before January 10, 2004 it will save $55m (£35m).

The company has $674m (£408m) in cash on its balance sheets and could look to use part of that to repay the money.

But analysts believe ntl will need that money elsewhere and are concerned the business could be on the brink of more radical restructuring of its debts - just months after emerging from bankruptcy protection.

Alternatively, a rights issue could be around the corner, giving new investors an opportunity to cash in on a share of a company which says it is on a much stronger foothold than before. The firm told investors it is considering "a range of options" to reduce its high-cost debts.

ntl had debts of $17.3bn before it retreated behind US bankruptcy protection rules which enabled it to swap debt for equity, reducing the amount it owed to $6.4bn.

The news came on the day that founder Barclay Knapp announced he was stepping down as chief executive and handing over power to chief operating officer Simon Duffy.

Mr Knapp, who said the firm was "back on track", will receive a pay-off worth £1.3m. The figure, which reflects his three-year contract, comes eight months after ntl agreed a deal with lenders to pull it out of bankruptcy protection.

Anthony Platts of Wise Speke stockbrokers, said: "The fact that Knapp is not leaving immediately implies that ntl's strategy will remain the same, concentrating on increasing revenues by growing its customer base and reducing churn.

"The City will be hoping that the long mooted tie-up with Telewest is now an even greater possibility with a new man at the helm."

Announcing figures for the three months to June 30, Mr Knapp said he had been encouraged by a £2.3m increase in revenues to £551.3m, and a rise in earnings to £173.8m from £167.4m a year earlier.

Bottom-line losses in the quarter narrowed to £159m, an improvement of 38 per cent on last time