UGC Europe, the firm which owns cable firm Chorus, confirmed yesterday it was interested in bidding for NTL Ireland.

However it is likely to face competition from a bid led by telecoms entrepreneur Mr Denis O'Brien, which may be backed by the private equity firm Carlyle Group.

The founder of Esat Group, who was outbid by NTL in 1999 for Cablelink, is understood to be putting together a consortium to back a bid for the cable operator.

Esat BT is also one of more than 10 parties which have made expressions of interest in NTL Ireland, which is scheduled to be sold off in March.

The firm is interested in bidding for NTL Ireland's corporate telecoms business rather than its residential cable network.

At least one other private equity group, possibly the Blackstone Group, is rumoured to be looking at a possible bid for NTL Ireland in a process that is being co-ordinated by Goldman Sachs.

Meanwhile, the head of UGC Europe's international bid team told The Irish Times yesterday that it had a $1 billion (€770 million) war chest to make acquisitions and invest in its companies.

Mr Shane O'Neill, who led UGC's unsuccessful bid to buy Cablelink in 1999, said it would invest heavily in NTL Ireland's network if it won the auction.

But he said UGC Europe would not "overpay" for assets and noted that it had recently bought Chorus - the Republic's other big cable network - and an operator in Paris at seven times earnings.

"This is about the right multiple for a fully upgraded cable asset," said Mr O'Neill, who met Government officials this week to discuss its bid for NTL and the firm's broadband plans.

UGC Europe's bid for NTL Ireland is likely to be examined by the Competition Authority and the Department of Enterprise, Trade and Employment, which retains the power to govern on Irish media mergers.

The regulatory authorities will analyse whether a dominant national cable operator that also owns programming content would be a threat to competition.

Mr O'Neill said there shouldn't be any competition issues raised by a UGC bid for NTL Ireland as there are competing platforms in the Republic, including satellite operator Sky and emerging wireless companies.

He said that telecoms firms would soon begin to offer digital television over their networks and the Government had a plan to deliver digital terrestrial television in the Republic.

Mr O'Neill also warned that there was a danger from a Government perspective that a private equity group would buy NTL Ireland and use the asset to generate cash rather than invest in new innovative services.

He said UGC Europe wants to merge Chorus - which operates outside NTL Ireland's franchise regions in Galway, Dublin and Waterford - with NTL to create a national cable firm capable of offering consumers broadband, telephone and digital television.

Mr O'Neill said it would take a considerable amount of investment to upgrade NTL's existing network, but he said UGC Europe would follow a growth strategy.

"We are never afraid to invest money if we can get a return for our shareholders," he added.

Merging NTL Ireland with Chorus would give the firm some big advantages, said Mr O'Neill.

"It is a scale game. We really believe, as a pan-European operator, bigger is better. It gives us synergies on buying equipment such as set-top boxes and buying programming."

UGC Europe became the biggest European cable firm when it acquired Liberty Media's interests in Chorus and Belgium cable operator Telenet Group last month.