The cabinet after a marathon session on Saturday also decided to ask for new tenders on plans to privatise management of two electricity power plants after receiving only one bid, from an unnamed Irish company.

Seven Arab and European companies, including Orange, France Telecom, Greece's OTE and a Kuwaiti company, had pre-qualified last year for bidding on the telecom deals.

But when the tender deadline closed three weeks ago, only bids from LibanCell, indirectly linked to Prime Minister Rafic Hariri, and Investcom, part of the Mikati Group with ties to Public Works Minister Nagib Miktai, remained standing.

Fresh attempt

In a seven-hour meeting presided over by President Emile Lahoud, the cabinet decided to try again. Telecommunications Minister Jean-Louis Kordahi was tasked with starting the process anew.

The delay, which has seriously compromised a government commitment to balance its budget, dates back to June 2001.

It was then that the government cancelled the licences under which LibanCell and Cellis had operated since 1994 in order to hold a public tender on re-awarding the licences.

The two companies have continued to operate on temporary licences since then.