ESAT Digifone has stepped up its efforts to finalise a deal with the Garda Siochana to use its telecommunications infrastructure to operate its mobile phone service.

Esat, which is due to launch its new service next month, has met with a number of Government departments, including the Taoiseach's Department, in an effort to make progress on planning permission for use of the Garda's phone masts.

Telenor, the Norwegian state telephone company, which has a 40 per cent staked in Esat, is also reported to have contacted the Taoiseach's office, to indicate its annoyance at the treatment of the consortium's planning request.

The Government has also come under pressure on the matter from the European Commission. Last week, EU Competition Director, Mr Karel Van Miert, wrote to the Government asking it to explain the planning process following a complaint from Esat that it was facing considerable delays in getting planning permission to erect its masts.

A spokeswoman for Esat yesterday denied weekend reports that the company was now close to collapsing as a result of the delays.

"Any suggestion that it is in trouble or facing collapse are very wide of the mark," she said.

She added that everything else was in place for launching the new service. Employees, technical support and a billing system, have all been finalised.

The issue of planning permission to erect its masts is crucial for Esat, which undertook to introduce its mobile phone service by the middle of February next.

It did a deal With the Garda to use its infrastructure, while providing the Garda with its own mobile phone equipment and a secure user system.

Under that deal, the Garda could receive up to £3 million worth of free telecommunications services annually.

Negotiations on the deal however, have yet to be concluded and the Attorney General is considering whether the arrangement could legally go ahead.

A spokeswoman for the Department of Justice said at the weekend: "If and when Esat Digifone meets all of the Department's requirements, then it should be possible to conclude a satisfactory agreement."

The EU has asked the Department of the Environment for its comments on the planning issues and how they relate to Esat Digifone.

The Minister for the Environment, Mr Howlin has said he will be responding to the letter in due course.

Despite this setback, Esat Digifone insists that it is still on target to introduce its new service next month.

It is confident that the difficulties in relation to the planning process can be overcome.

When the second mobile phone licence was granted last May, one of the conditions imposed by the Department of Transport, Energy and Communications was that it had to achieve 80 per cent coverage within nine months.

The company needs around 150 masts to launch the first phase of its service, and another 50 to launch phase two of its network.

It currently has agreed about 100 masts.