Qwest forced to restate accounts by £1bn

The latest figures emerged before a series of US House Energy and Commerce committee hearings into deals made by Qwest with Cable & Wireless, Flag Telecom and Global Crossing. The adjustments focus on a two-year period to 2001.

Qwest, which has debts of $26.5bn, could still avoid bankruptcy after reaching a $3.4bn credit facility agreement with creditors.

Regulators are continuing their inquiry into accusations of revenue-inflating levelled at Qwest and its competitors. They will investigate whether the companies traded excess capacity in each others' networks to artificially boost sales.