IDA Ireland has agreed a settlement with the cable firm Chorus over debts worth €4.5 million accumulated through its contract with US firm Global Crossing.

The deal follows detailed negotiations between the two parties and will remove a potential stumbling block from Chorus's ongoing examinership process.

The IDA will now vote in favour of the examinership, which is due for mention in the High Court today and should be finalised by mid-May.

However, it is understood the Commission for Communications Regulation (ComReg) has not yet agreed to the proposed restructuring plan for Chorus.

ComReg is owed about €1 million by Chorus for fees the cable firm refused to pay it to cover the cost of regulating the cable television sector.

ComReg is extremely unhappy with Chorus because it feels the firm stopped paying its levy in the full knowledge that it would go into examinership.

Industry sources said it was unlikely ComReg would oppose the examinership process for fear of putting the company out of business.

But the regulator may try to cut a new deal with the examiner, Mr John McStay.

Under the deal that IDA Ireland has arranged with the examiner, Chorus will pay the agency €225,000 in cash.

This will give Chorus access to a third of the telecoms capacity that it originally ordered from the IDA under its deal with Global Crossing.

Chorus will use this capacity to supply its customers with internet services following its financial restructuring, which will see Liberty media invest almost €100 million in the firm.

Chorus, which supplies cable television to 200,000 people, amassed huge debts building up its network across the Republic.

The High Court heard this year that the estimated shortfall of funds if the firm was liquidated was about €490 million.