BT chief 'to quit early'

Sir Peter Bonfield: BT chief executive since 1996

The chief executive of British Telecom, who some investors blamed for bringing the firm to a cash crisis, is set to step down in the middle of next year, sources have said.

Sir Peter Bonfield, whose contract ends in December 2002, is poised to retire early after the completion of the telecoms giant's initial revival plan, insiders told the Financial Times newspaper.

If true, the resignation would come a year after Sir Iain Vallance stepped down as chairman, as criticism grew of a corporate strategy which landed BT with almost £30bn of debt.

BT has dismissed earlier speculation over Sir Peter's early retirement as "froth".

Restructuring clause

Sir Peter's original contract was due to expire at the end of this year, five years after he took over as chief executive.

But new chairman Sir Christopher Bland extended the contract by a year, adding an £828,000 bonus if Sir Peter stayed to "oversee a restructuring".

It had seemed likely that BT would follow up the spin-off of its mobile phone unit, now called MM02, with a more fundamental break-up.

Company chiefs were last month considering applying for separate telecoms licences for other units within the BT empire, ahead of giving them at least partial independence, BBC News Online revealed last month.

But a further break-up now looks off the cards, latest reports say, freeing Sir Peter from obligations.

Sir Peter has long expressed desires to move to the US, which he visits frequently.