THE future of phone firm Orange appears more secure after its parent company was given a healthy financial prop by the French government.

France Telecom's debt mountain was partially alleviated by a record 15bn euros (£10.1bn) rights issue, 9bn euros worth from the state.

Orange has enjoyed healthy profitability in the past but economists believe it was dragged down by its owner's debt burden.

France Telecom's problems were blamed for a series of job cuts in the UK company, which employs 5,000 staff in the North-East.

The action to arrest France Telecom's financial worries was welcomed by Orange.

A spokeswoman said: "We would welcome the news and are totally behind it. It is positive for all elements of the France Telecom group and will secure its future."

The sheer size of the capital input was greeted with surprise and admiration in the region.

Anthony Platts, of Wise Speke, said: "The huge rights issue should be seen in a positive light from the perspective of people at Orange. The biggest factor inhibiting the company - and Orange as a subsidiary - has previously been the enormous 68bn euros debt mountain.

"It is an impressive achievement to have arranged a rights issue, underwritten by a consortium of banks, of such magnitude."

The French government holds a 56 per cent share in France Telecom and its ability to bankroll the troubled company has raised the credit rating for its bonds. It will expect the rights issue to enable the firm to use the capital injection to plot a more acceptable course until greater stability is seen in the telecommunications industry.