Eurotunnel, still digging itself out of a mountain of debt, yesterday reported net losses of 5.81 billion francs in 1997, down from 6.00 billion francs in losses in 1996.

But rising traffic enabled the company that runs the tunnel under the English Channel to post an operating profit of 653 million francs - a turnaround from an operating loss in 1996 of 234 million francs.

Eurotunnel insisted that if a restructuring plan signed last month had been implemented early in 1997, its net losses for that year would have been much lower - 3.08 billion francs.

Mr Richard Hannah, transport analyst at Union Bank of Switzerland, said the 1997 loss was in line with expectations. But he added that the traffic figures proved that Eurotunnel's own forecasts were "`too optimistic".

"Traffic was below their prospectus forecast," he said.

In its statement, Eurotunnel said that during 1997 its services were "progressively rebuilt".

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