The merger between BT and MCI Communications of the US is expected to go ahead on the original financial terms, it was reported yesterday.

The £17.8 billion sterling (£19.6 billion) price is understood not to have been altered despite a warning from MCI earlier this summer that it would lose $800 million (£550 million) this year because of its expansion into the US local telephone market.

The warning prompted a dramatic slide in BT's share price and senior executives began a wide-ranging review of the planned deal which is due to be completed by the end of the month. - (PA)