C AND W OFFERED ROLE IN NEW JAPAN TELECOM COMPANY

  A Japanese businessman announced plans for
  a new telecommunications firm in which Britain's Cable and
  Wireless Plc would be a core company.
      However, the plan, unveiled by senior Federation of
  Economic Organizations official Fumio Watanabe, does not
  specify what stake Cable and Wireless would have.
      "The share holdings of the core companies should be equal,"
  Watanabe said in a statement. "The actual percentage of
  shareholdings should be agreed by the core companies."
      He said the eight core companies will provide directors for
  the firm.
      "The new company shall immediately set to work on the
  feasibility study of constructing a new cable for itself,"
  Watanabe said.
      Watanabe has acted as mediator between two rival groups,
  one of which included C and W, seeking to compete against
  &lt;Kokusai Denshin Denwa Co Ltd>, which now monopolizes Japan's
  overseas telephone business.
      The Post and Telecommunications Ministry has said it wants
  only one competitor to KDD and has backed Watanabe's efforts.
      A British source, who declined to be identified further,
  said the proposals could open the door to further talks between
  C and W &lt;CAWL.L> and the other firms involved.
      C and W had earlier rejected a reported proposal which
  would have given it a five pct share in the new
  telecommunications firm, compared to the less than three pct
  stake Watanabe originally proposed. C and W has a 20 pct stake
  in one of the two firms Watanabe has proposed should merge.
      The British source said the decision not to specify the
  exact shareholdings of the core companies could leave the door
  open for further discussion.
      "It's probably a sensible approach on their part," the
  British source told reuters.
      C and W has also been pushing hard for permission to lay a
  new cable between Japan and the U.S.
      The proposed merger has sparked an international row, with
  British government sources threatening retaliatory action
  against Japan for what they see as discriminatory practices
  against foreign firms.
      The sources said last Friday that one option for Britain
  would be to revoke licenses of Japanese banks and securities
  companies operating in London.
      The U.S. Has also attacked the original merger plans,
  saying that both rival consortia should be licensed.
      Asked about participation by other U.S. And European firms,
  Watanabe said, "They will not be core companies but if they wish
  they could participate." Under the Japanese law, total foreign
  participation would be limited to one-third.
      "It might be wise for C and W to join the new firm which has
  the support of many influential backers and work within this
  for the realization of their ideas," Watanabe told reporters.
      The other core firms are Mitsubishi Corp &lt;MITT.T>, Mitsui
  and Co &lt;MITS.T>, Sumitomo Corp &lt;SUMT.T>, Matsushita Electric
  Industrial Co &lt;MC.T>, Toyota Motor Corp &lt;TOYO.T>, C Itoh and Co
  &lt;CITT.T>, and &lt;Pacific Telesis International Inc>.
      Watanabe said that his latest proposal represented his
  final effort.
      If it fails to satisfy the British government, it will be
  up to the Japanese government to explain its position, he said.
  

