Upgrading Cablelink would cost around £120 million, the cable company's chief executive Mr Kevin Windle has said. He said the company was also anxious to ensure that the necessary upgrading goes ahead, even though the Government is set to force Telecom, its major shareholder to sell its stake.

Mr Windle was speaking after the publication of the Cable Communications Association of Ireland's (CCAI) launch of a report on the industry's plans to introduce digital TV and internet services later this year.

Mr Windle said around £120 million of the £250 million investment needed to upgrade cable systems in Ireland to provide services such as digital television, internet services and telephony, would be accounted for by Telecom.

He said he had met the Minister for Public Enterprise, Mrs O'Rourke, regarding Cablelink's future. The Minister is currently considering the involvement of Telecom Eireann in Cablelink - it has a 75 per cent stake - and may direct the telephone company to sell it.

Mr Windle said that sometimes when there was a question mark over the majority shareholder the issue of investment is "sometimes put on the back burner." He said he had already "flagged to the Minister" that he did not want Cablelink to be in some "limbo world" as a result.

Mr Windle said he believed this had been taken on board by Mrs O'Rourke.

The Minister wants Telecom to divest from Cablelink because she believes the telephone operator will not develop the service as it would end up competing against itself. Once upgraded Cablelink could be used to provide telephony services.

Mr Windle confirmed that there had been expressions of interest from other parties since it emerged that 75 per cent of Cablelink may be put on the market. However he said there had been no serious approaches.

RTE holds a 25 per cent stake in Cablelink. Mr Kevin Healy, Director of Public Affairs, said last night that RTE did not wish to sell its stake. He refuted suggestions that RTE's continued involvement in Cablelink could cause a conflict of interest. The cable companies - including Cablelink plan to offer digital services as does RTE. This means RTE will be competing with itself.

Mr Healy said RTE had set up Cablelink which provided BBC and UTV, for example, stations which were in competition with the national broadcaster.