Marconi is resisting attempts by its bankers to bring in David James, the company rescue specialist, to mastermind the restructuring of the stricken telecoms equipment group.
The 30 banks that, along with bondholders, are owed £4.3bn by Marconi, have decided that Mr James – who is credited with saving the Millennium Dome – is the man for the job. Led by Barclays and HSBC, the lenders have already approached Mr James.
"The banks want David James," said one financial source. "He has a long history of going into difficult situations and he is trusted by the banks."
However, Marconi is insisting other candidates be considered. It is unclear where any company doctor would sit in relation to the executive management. The company declined to comment. One telecoms executive said: "Marconi recognises the need for a restructuring expert to strengthen the management team but it wants to look more widely at a number of candidates."
The group's chairman, Derek Bonham, the chief executive Mike Parton and the finance director, Steve Hare, are concerned that their positions would be undermined by an appointment made by the banks. They want to be seen as still running the show. The lenders appear to see things differently: after Marconi breached its banking covenants, the creditors feel they can call the shots.
Mr James, who has also been linked with a rescue role at Railtrack, feels he can only join with the agreement of the Marconi management. As the company and the banks are still some way from an agreement on the company doctor issue, an announcement is not thought to be imminent.
On Thursday this week, Marconi will post full-year results which are expected to show a loss of nearly £700m before massive exceptional charges, but the appointment of a rescue specialist is thought unlikely to accompany the figures.
The City will be looking for news on the restructuring and refinancing. It is unclear whether the crisis will be resolved with a debt-for-equity swap or a breakup. Net debt is thought to be about £2.9bn but analysts believe this must be brought down to between £800m and £1.5bn to be sustainable.
The company, which has cut thousands of jobs and sold assets in an effort to get its house in order, said it would update shareholders on 16 May. Marconi has already presented a business plan to its banks and bondholders which, it said, shows its core business producing an operating profit in the "early stages" of a five-year period.Reuse content