EUROTUNNEL, the AngloFrench channel tunnel operator, said yesterday it had cut first half losses and hoped an agreement could soon be reached on a vital bank debt restructuring.

Losses after interest totalled 3.04 billion francs (£366 million), an improvement of 618 million francs on the same period in 1995. Since March, Eurotunnel had broken even at the operating level before financial charges and after operating expenses and capital expenditure.

French co chairman, Mr Patrick Ponsolle, said this proved it was economically viable but needed to lighten the debt burden.

But the British and French cochairmen differed over the timing of the deal which would refinance 72 billion francs of debt and unpaid interest owed to its 225 strong bank syndicate.

Eurotunnel has been in bank talks since it froze payments on its junior ranked loans a year ago, after it undershot cash targets in 1995. A mandate for two mediators, named by a Paris court to help negotiations, expires at the end of September.