Cable television firm Chorus is in talks with the Government about settling its €100 million lawsuit against the State that has been running for over a decade.

It has also signalled its intention to invest €25 million over three years to upgrade its cable network to provide broadband services to compete with Eircom.

In his first interview since Chorus emerged from examinership on Wednesday, Mr Phil Freedman, Chorus chief executive, said he was in discussions with the Government about finding an amicable settlement.

"I don't want to cloud the future of Chorus with issues of the past," he said, in the clearest signal yet that Chorus is now willing to settle the legal case.

Chorus lodged the suit against the Government more than a decade ago, alleging that the Government's failure to shut down local television deflector systems was undermining its business.

Chorus and Government officials are understood to be in talks about the legal costs incurred during the litigation, which has never been heard in open court.

The costs, which amount to up to €1 million on each side, are likely to be shared by both sides in any settlement.

If a settlement is not reached the Government is seeking a dismissal in the courts on June 14th.

Meanwhile, Mr Freedman said that all Chorus's debt issues had been settled through the examinership process, which has seen Liberty Media take 100 per cent ownership of the cable company.

He said Liberty had agreed to fund the upgrade of Chorus's existing cable operations in Cork, Limerick and parts of Kildare at a cost of €25 million in three years.

This would enable Chorus to offer most of its 120,000 cable customers broadband as well as digital television in these areas.

At least 200,000 homes would be capable of ordering these high speed internet services, he said.

The cost of upgrading its cable network had fallen considerably because it was now able to use new Government-owned fibre networks in Cork and Limerick.

Chorus would also continue to migrate its 200,000 existing television customers towards its digital TV product.

At present just 42,000 customers have signed up for this service, he said.

Mr Freedman said the firm had already invested to improve its customer service over the past one-and-a-half years and 90 per cent of customer calls were now answered in 30 seconds.

Mr Freedman also stressed the benefits of a future merger between the two big cable companies in Ireland, NTL and Chorus.