Eircell and Meridian Communications, the company which runs the Imagine mobile phone service, are on the verge of agreeing a deal to repatriate its 20,000 customers to Eircell.

Sources close to the deal said the customers would be transferred to Eircell. In return, Eircell would not pursue Meridian for the £6.7 million (#8.5 million) it claims it is owed.

Neither party would comment on the details of the deal last night.