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The boards of both companies are believed to have given the go ahead. The merger will create a monopoly cable Internet provider and generate significant cost savings, which should put it in a stronger position to compete with BT in the Internet market and Sky for TV customers.

Both companies went into bankruptcy protection in the US in 2002 after incurring billions of dollars worth of debt as they bought up the UK cable franchises.

A merger has been mooted ever since, but was on hold until both companies came out of bankruptcy protection and relisted on the Nasdaq. Since then disagreements over the relative values of the two companies and the management structure of the new company have delayed the inevitable joining of hands.