A FRENCH court has given debt-laden Eurotunnel legal protection from its creditors for six months.

While the decision was welcomed by the Channel Tunnel operator, and keeps services going between Kent and France, it by no means secures its long term future.

The Anglo-French business, which owes £6.2bn, still faces bankruptcy if creditors fail to agree a debt restructuring deal.

They have been feuding over the relative pain and gain faced by large and small creditors.

Deutsche Bank has campaigned vigorously against Eurotunnel’s proposals. Eurotunnel wants to cut its debt to £2.9bn.

The row has twice halted proposed annual meetings and stalled year-end financial results.

Eurotunnel sought legal protection from Paris Commercial Court after it failed to win creditors round to its way of thinking.

French official auditors had already begun a formal "warning" procedure in February in the light of Eurotunnel’s parlous financial state.

Eurotunnel hailed the court’s decision because it recognised that the business was "not insolvent" and the Tunnel would continue to operate normally.

It ensures that Eurotunnel does not have to pay interest on its debt for the next six months, and appoints a court official to monitor its talks with creditors.

Eurotunnel’s chairman and chief executive Jacques Gounon, said, "In a difficult context, the Paris Commercial Court has made a positive decision which will protect the business and the public service which it operates.

"I am convinced that we now have the conditions necessary to achieve a financial restructuring for Eurotunnel within the time allowed."

Eurotunnel claimed there was now "a convergence of views amongst the principal creditors who consider that this proposal constitutes the basis for pursuing negotiations that will lead to a reconciliation of their positions."