EUROTUNNEL’S debt burden is poised to lighten after a court backed its refinancing plan.

The Channel Tunnel operator cleared another hurdle in its battle for survival when the

Paris Commercial Court approved a package that will slash debt from £6.4bn to £2.8bn.

It paves the way for publication of the company’s annual accounts for 2005 and 2006, and a lifting of the share suspension.

The company said the decision "lifts the shackles of debt" and allowed it to look to the future with confidence.

With interest payments falling from £320m a year to £150m, Eurotunnel is set to invest in new services, including a freight operation. "The decision is good for the company, its 2,300 employees and its shareholders," the company said.

A spokesman said that all shareholders had had to "share the pain" but that was better than losing everything if the company had gone bust.

The plan will be financed through a banking consortium of Goldman Sachs, Deutsche Bank and Citigroup.

A new Groupe Eurotunnel SA will be created which will buy shares in Eurotunnel Plc and Eurotunnel SA. An annual meeting is expected in May.