EUROTUNNEL has told staff on both sides of the Channel that it will make sweeping job cuts from January as part of an extensive cost-cutting programme intended to buy the company time to restructure its £6.4 billion debt.

The redundancies are part of a three-year plan designed to prevent the banks taking control of the debt-laden company that the new French management team will present to its creditors at the end of the month.

It is understood from a meeting of the management and French unions that Eurotunnel is considering adopting the tactics of low-cost airlines as part of the strategy.

Details of the plan were discussed with works councils on Thursday in Paris and yesterday in Folkestone, where it emerged that the Channel Tunnel operator could reduce the number of services — and charge higher fares for passengers travelling at peak times.

Eurotunnel is thought to be looking at running fewer carriages on its least-busy shuttle trains. At the same time, a pricing structure linked to capacity is to be introduced.

The group is also thought to be planning a loyalty programme that would allow customers to join the train without making a booking.

Eurotunnel’s plan is crucial for the troubled company’s survival as it covers the period after November 2006, when the company’s subsidy from the British and French Governments, known as the minimum user charge, ends.

Last month Eurotunnel launched Project Dare, a series of workshops looking at different areas of the business that are to become the basis for the business plan.

A spokesman for Eurotunnel confirmed that managers, including Jean-Louis Raymond, the group’s chief executive, met French union representatives on Thursday and spoke with representatives from the T&G in Folkestone yesterday.

“The works council in France and union representatives in Folkestone were updated on the company’s third-quarter performance. We are meeting them again next week to discuss the results of Project Dare which will form the basis of the business plan,” the spokesman said.

However, he refused to confirm that elements of the business plan had been discussed at the meetings, saying only that the plan was still to be finalised.

Analysts were sceptical of suggestions that Eurotunnel could raise revenue by cutting train services and adopting yield management techniques, used by the airline industry.

“The trouble with Eurotunnel is that the only truly marginal cost it has is electricity. You don’t need many cars on a shuttle to make it worthwhile running,” one analyst said.

“Whatever costs they take out. The ferries are running off such a low-cost base that they can always come back and undercut Eurotunnel,” the analyst said.

Formal consultation on the redundancies will begin in January, unions have been told. There are suggestions that the company could be looking to cut as much as 20 per cent of its workforce of 4,000.