BT faces fresh scrutiny after #29bn fixed-line network offer

British Telecommunications' strategy is set to come under fresh scrutiny this week after a consortium led by WestLB, the German investment bank, offered to buy its national fixed line telephone network for about £18 billion sterling (#29 billion). News of the approach follows last week's £8 billion bid by a consortium of US finance groups for BT's local telephone wires and could increase pressure on the group to consider a sell-off of infrastructure.

The WestLB proposal is thought to have come in a meeting with Mr Philip Hampton, BT's finance director, several weeks ago. People close to the talks described the approach as "tentative and embryonic".

BT has not ruled out the WestLB proposal but is understood to be in no hurry to dispose of its fixed-line business, which it considers to be an important part of its strategy. However, an £18 billion windfall from any deal would wipe out BT's remaining debts, which have weighed heavily on the group in recent months. Shareholders might be tempted to press management to consider the offer.

Last week, two top shareholders called for a rethink of BT's decision to reject the bid for the local network, arguing it would reduce debt and free BT to focus on its core consumer services.

The two offers have come at a time of upheaval at BT, which is preparing to demerge its wireless division this autumn and is undergoing a restructuring programme aimed at rescuing the group from heavy debt and falling profits. The group's debt, which peaked above £30 billion, had been reduced to £17.5 billion at the end of June by a £5.9 billion rights issue and disposals of international assets as it concentrates on its UK business.