US financier Mr Carl Icahn has offered to buy bankrupt telecom firm Global Crossing for $700 million (Eur 594 million).

The report in the Wall Street Journal's online edition said Mr Icahn, chairman and 80 per cent owner of XO Communications Inc, is offering $250 million in cash, $200 million in secured notes, $200 million in preferred stock in a new firm, and warrants to acquire stock at $10 a share.

The offer surpasses an earlier bid of $250 million from Singapore Technologies Telemedia and Hutchison Whampoa of Hong Kong, and a $255 million rival bid from US telecom operator IDT.

IDT had argued that it was a threat to national security to give the telecom firm to a foreign entity because the Justice Department, CIA and FBI were among its clients. Hutchison Whampoa withdrew its part of the offer on April 30th, after the US government announced an inquiry into its ties to the Chinese government, the Journal said.

Singapore Technologies has pressed on with plans to acquire Global Crossing and plans to submit a revised offer to regulators, according to the Financial Times of London.

Global Crossing, a start-up that became a giant of the telecom sector by spending $16 billion in an acquisition spree, filed for bankruptcy in January 2002.