BT's plan to raise £2.3bn from selling its property portfolio has run into legal problems that are threatening to delay the deal until next year.
This raises questions over BT's appetite for the deal, which was agreed in January when the company was saddled with £30bn of debt. After a bumper rights issue and disposals, BT's debt is now £17.5bn.
The telecoms company had originally hoped to seal the property deal this month, but it is understood that legal problems are holding up completion with the quoted property company Land Securities and the private property company William Pears Group.
Ian Henderson, chief executive of Land Securities, said: "We need to get an alignment of interests with the occupier. We are working very hard on that at present and we hope to see the smoke emerging soon.
"Structuring a deal that includes 7,000 properties is very difficult, and forging that relationship takes a little longer. Perhaps expectations were a little optimistic, because originally we had hoped to have the deal completed about now."
A spokesman for BT admitted that some "legal issues needed ironing out" and that the transaction was "continually being flexed". But he denied that BT had lost its appetite for the deal. "We are still very hungry. We want to focus on our core competencies – telecommunications. Property is not core to what we do."
Land Securities and William Pears have formed a joint venture company to hold the properties, named Telereal. When the deal is completed, Telereal, which will finance the deal through the bond market, will also manage the properties for BT.
Last week BT also revealed plans to demerge its wireless division. Named mm02, the company will be loaded up with just £500m of debt as opposed to £2bn to £3bn mooted earlier this year.Reuse content