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Telecom trainer engaged in talks after cash crisis

A RESCUE package is being prepared to secure the work of a national training organisation which has placed itself in the hands of administrators.

Merger talks have taken place between nto.telecom and two other training organisations after the company became embroiled in an investigation over pound;10.9 million of European Social Fund money.

The trainer has been unable to account for how some of the cash was spent, following the collapse of a company which it had contracted to deliver training.

The Department for Education and Employment was due to attend a meeting of the organisation's creditors yesterday, having requested that the European cash is paid back.

The department has stressed that there is no suggestion of fraud and there will not be a police investigation into either organisation. But a spokesperson said: "We have carried out an investigation and we will be reporting on the results from this early in the new year."

The DFEE says the NTO was able to account for how it would pay pound;4.2m of the debt but a question mark remained over the remaining pound;6.7m.

The board of nto.telecom has ben in talks about a merger with another training organisation and the DFEE is expected to issue a consultation document by Christmas on options for the future of training in the sector.

The two trainers most likely to be involved are the "e-skills" body and EMTA, previously known as the Engineering and Maritime Training Authority.

Dr Michael Sanderson, chief executive of EMTA, said: "I feel it would be inapproriate of me to comment while the DFEE is still in the process of carrying out the consultation exercise."

Merger with EMTA is already understood to have the backing of some of nto.telecom's biggest clients, including British Telecom and Vodafone, although it is likely that any outfit taking over the sector will want the European debt to be paid from the public purse.

It is unlikely that any rescue package will involve nto.telecom continuing as a separate entity. Malcolm Wicks, the lifelong learning minister, has made it clear that he would like to see the number of training organisations, currently standing at 73, to be reduced to save money in some of the smaller industry sectors.

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