Dermot Desmond's investment vehicle, International Investment Underwriting (IIU), is believed to have sought information from Eircom regarding the sale of its non-mobile assets.

It is understood that Mr Desmond and IIU are associated with millionaire businessman Mr Pearse Flynn concerning a possible bid for Eircom. The process is still at a tentative stage. Mr Flynn has said he was working in tandem with a prominent Irish businessman and an international consortium. Confirmation of the linkage between Mr Desmond and his company with Eircom is likely to positively affect the share price, which yesterday closed just five cents off its all-time low.

The possibility of IIU making an offer raises the prospect of a bidding battle, which would be good news for Eircom investors and would strengthen the company's position in its negotiations with eIsland. That consortium, led by Esat founder Mr Denis O'Brien, recently raised its bid 10 cents to €1.10 per share, valuing the company at €2.42 billion (£1.9 billion)

Neither Mr Desmond nor Mr Flynn could be contacted for comment last night. But Mr Flynn has told The Irish Times that his backers have a good knowledge of Eircom. He also knows the telecoms industry, and indeed Eircom chief executive Mr Alfie Kane, through his former senior roles with global telecoms companies Newbridge Networks and, subsequently, Alcatel.

Mr Desmond has already successfully invested in the Irish telecoms industry through a 10 per cent stake in Esat Telecom. He was one of Mr O'Brien's original backers, through IIU, and is thought to be keen to become involved in telecoms again.