Stricken telecoms group Marconi has agreed a life-saving deal to overhaul its finances, it was announced today.

The deal will leave shareholders with a 0.5 per cent holding in the group.

However, they will also receive warrants allowing them to purchase another five per cent of the share capital once the company's market value has risen to £1.5 billion.

Banks and bondholders will receive a combination of cash, new debt and equities on a pro-rata basis.

The restructuring is expected to be completed by January.