'Railtrack' warning by BT boss Bland

Sir Christopher Bland has warned that proposals to break up BT would create a "Railtrack" of the telecoms industry.

In an interview with The Independent on Sunday, the chairman of BT said splitting the company into two - retail and wholesale - would be, "highly destabilising, hugely expensive ... and I would resist it very, very strongly".

Sir Christopher's comments come after the e-commerce and energy minister, Stephen Timms, said last month that the new multimedia regulator, Ofcom, "will need to take a view" on whether BT should be broken up. Ofcom, which will come into force on 29 December, is likely to conduct a review of BT in the spring.

Rival telecoms companies, notably Cable & Wireless, have argued for more than a year that BT should be broken up. They believe there is a possibility that BT's wholesale arm offers its retail operation favourable deals. BT denies this.

But Sir Christopher added: "We would put forward very convincing arguments why [retail and wholesale] are hugely interlinked. The gas [deregulation] model doesn't apply here. If you want an example of the chaos that would result, then it is the railways."

BT claims it has established "Chinese walls" between its retail and wholesale arms. And Sir Christopher said that, "if I am going to be honest, then I believe these calls [for a break-up] are primarily designed to destabilise BT".