Three major telecommunications projects worth in excess of $270 million (€318.6 million) have been scrapped or put on hold due to the cash crisis in the global technology industry.

International telecoms firm GTS and a London-based ebusiness incubator, MWB Konnect, yesterday confirmed they would not continue with plans to construct two internet data centres in Dublin.

In addition, 360Networks, a major provider of international telecoms and internet connectivity, has halted construction of an internet data centre in Clonshaugh, Dublin, and may attempt to sell the facility.

The Canadian-based firm, in which Mr Denis O'Brien invested and sits on a strategy board as adviser, yesterday filed for bankruptcy protection and is desperate to raise cash.

The company also intends to initiate insolvency proceedings for some European subsidiaries. This follows the decision late on Wednesday to cut 44 per cent of its global workforce, some 800 people. An IDA spokesman played down the significance of the decisions. "It's not a big disaster and we will still have in excess of one million square feet of hosting space by the end of the year," he said.

Such hi-tech enterprises have been seen by the Government as central to its e-business strategy. The IDA has conducted a major marketing campaign in the US and Europe to attract investment.

At least 22 internet data centres originally indicated they would invest in the Republic but since the global downturn in the telecoms industry several firms have cancelled or stalled these plans.

"Banks just aren't willing to dole out much more money to telecoms companies now until they begin to see a return on existing investments," said Mr Ian McDonald, telecoms consultant with Mason Communications.

"The question now is can the Irish marketplace sustain the companies which have already invested here. These companies must look to Europe to gain business," he added.

GTS and 360Networks' share prices have been hammered in recent months due to the huge levels of debt incurred while building out expansive global telecoms networks. Rumours of possible bankruptcy have dogged both companies. 360 Networks, which planned to invest $70 million in the Republic, last week told building firm John Sisk & Sons to halt construction at Clonshaugh.

The company laid off nine of its 24 Irish employees when the firm defaulted on a scheduled $10.9 million interest payment. The possible demise of 360Networks may also impact on Irish firms' access to international broadband connectivity. Along with Global Crossing, 360Networks provides corporates with a trans-Atlantic cable connection.

A spokesman for GTS said its decision to pull back from completing a $40 million Internet data centre in Citywest was prompted because there was no longer a shortage of hosting space in Dublin. A third $161 million internet data centre proposed by MWB Konnect for a site in Ballycoolin has also been aborted. A spokesman confirmed last night the company had recently given up an option for the site.

Meanwhile, another international telecoms firm with significant investments in the Republic, Metromedia Fibre Networks, is also reportedly under serious financial strain. The Financial Times reported the company had to close a $350 million bank loan by close of business yesterday or face a possible cash crisis at year-end.