A telecoms firm at the centre of an Oireachtas inquiry into cost over-runs on an Iarnr≤d ╔ireann signalling project will seek the appointment of a liquidator today.

It is understood Modern Networks Ltd (MNL) will ask for Mr Ray Jackson of KPMG to be appointed to sell its assets.

High Court protection was lifted yesterday after its examiner indicated he could not save the company.

Mr Jason Sheehy of BDO Simpson Xavier was appointed in June after the firm, which is controlled by Mr Jay Murray, said it could not meet its debts.

The company, which employ 120 people and 120 subcontractors, said its viability was threatened because of a £2 million dispute with Iarnr≤d ╔ireann over the signalling plan.

MNL's investors were unwilling to put more money into the company because the volume of business they expected to get from Eircom had diminished, it is understood.

The company's links with Iarnr≤d ╔ireann are likely to be closely scrutinised by a subcommittee of the Oireachtas Joint Committee of Public Enterprise and Transport next month.

The subcommitee's inquiry was set up to establish why the projected cost of the Mini CTC signalling system, which MNL was building for Iarnr≤d ╔ireann, has risen to £50 million from £14 million.

Iarnr≤d ╔ireann is understood to have spent £16 million on the project already.

But the system is incomplete. Consultants to the Department of Public Enterprise said earlier this summer that the postponement of the project was causing "major problems" for engineers left maintaining worn out signalling equipment.

Soon after Mr Sheehy was appointed, Iarnr≤d ╔ireann cancelled its contracts with MNL and its contract partner, the British firm Alstom.

In a preliminary statement last month, the subcommittee's chairman Mr Seβn Doherty said a parallel project to construct a telecoms network for Esat was linked with Mini CTC from the outset in 1997.

Iarrnr≤d ╔ireann's prioritisation of the Esat project was linked to the overruns.

Esat, then chaired by its founder Mr Denis O'Brien, was given access to the Iarnr≤d ╔ireann railway even though the awarded breached the procurement policy of its parent, CI╔.

The Esat cable was laid by mechanical plough before the Iarnr≤d ╔ireann system.

The sub-commitee also wants to find out why four Iarnrod Eireann executives left the State company to join MNL.