Cable & Wireless today confirmed that it would postpone plans to split the business into two because it could not proceed confidently in the current volatile market conditions.

The telecoms carrier, which reported interim results today, promised to carry on with the demerger of the UK business from its Panama to Macau operations in the rest of the world, and said it could rapidly complete its own division once "markets are stable and functioning properly".

John Pluthero, who previously ran both divisions, is now stepping aside from the company's International business, to be replaced by Tony Rice, who was previously group finance director.

Mr Pluthero continues to run the UK operation, as executive chairman of the division, which also comprises business telecoms operations in Europe, Asia and the United States. Both he, and Mr Rice report separately to company chairman, Richard Lapthorne.

Cable & Wireless offset short-term disappointment by lifting its profit forecast as it took into account the strengthening dollar and the benefits from the acquisition of Thus.

It said it would earn at least £780 million on an underlying basis this year - up from a range of £702 million to £725 million.

The improvement stemmed from £30 million of gains from the acquisition of UK rival Thus, including £7 million of synergy benefits. Strengthening of the dollar from the previously forecast exchange rate of $2 to the £1 to $1.88 will add another £29 million to the reported results, C&W said.

In the half year to September 30, Cable & Wireless said that profits before tax were £129 million after £61 million of exceptional charges related to ongoing restructuring, down from £161 million a year ago, following revenues of £1.64 billion, up 5 per cent on the year.

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