The move is aimed at persuading US regulators to approve its proposed pounds 13bn takeover of MCI, the American long-distance phone operator, by demonstrating that the UK market is open to competition and BT is no longer protected from takeover.
The golden share allows the Government to veto changes to BT's constitution which prevents anyone from owning more than 15 per cent of the shares. The provisions, which also apply to Cable & Wireless, which was privatised in 1981, were designed to prevent the companies from being bought up by unwelcome foreign predators.
Since the announcement of the MCI merger, the biggest such deal in UK corporate history, on 3 November the issue of the golden share has become a potentially serious stumbling block for the US telephones watchdog, the Federal Communications Commission.
The FCC has to give the MCI link-up its approval if the deal is to go ahead. BT must prove to officials that US companies could enjoy the same competitive access to British telecommunications markets that BT will get in the US. AT&T, the largest US phone company, has pledged to fight the deal on the grounds that BT still has a virtual monopoly of the local telephone network to UK homes.
Last night a senior US government source said removing the golden share would eliminate one of the FCC's biggest worries. The source said: "The golden share is certainly a cause of some concern. Unavoidably so. The idea that BT could buy all of MCI without US operators having the same opportunity to take over BT raises serious worries for us."
However, any move to lift BT's golden share would almost certainly have to apply to Cable and Wireless as well. This could pose difficulties for Ian Lang, President of the Board of Trade.
Although BT may be protected from takeover by its sheer size, C&W, valued at pounds 13bn, would be more vulnerable. AT&T is thought to have looked at mounting a bid in the past but was deterred by the Government's special share.
The BT proposal is not thought to have been considered yet by Mr Lang or the DTI minister responsible for competition, John Taylor. But any decision would have to be approved at Secretary of State level.
Golden shares in BT and C&W have no time limit, unlike those in regional electricity companies.
Earlier this year Mr Lang refused to lift golden shares in National Power and PowerGen, the electricity generators, after the US electricity company Southern disclosed that it was interested in bidding for National Power.
Mr Lang defended his decision on the grounds that the electricity generation market was not yet sufficiently open to competition. On those grounds he would have difficulty abolishing BT's golden share since it still controls more than 90 per cent of the UK market.
The only time a golden share was lifted, allowing a hostile foreign bid to go ahead, was when Ford of the US bought Jaguar for pounds 1.6bn in 1989.
Speaking yesterday, Sir Peter Bonfield, BT's chief executive, said he believed the deal with MCI would take a year to get approval. "There are hurdles to overcome, but nobody believes they are insurmountable," he said.
Separately BT gave the first indications that its huge increase in advertising and marketing spending was holding competitors in the cable industry at bay. Announcing half -yearly profits, the company disclosed that it had doubled marketing spending so far this year, adding around an extra pounds 60m to its advertising bill. The "good-to-talk" campaign helped to raise call volumes by 11 per cent between June and September.
Pre-tax profits fell slightly from pounds 1.61bn to pounds 1.599bn in the six months to September, as a result of the near doubling of redundancy costs from pounds 123m to pounds 235m. Some 3,200 staff left BT over the period, many of them from middle management jobs.
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