More than $5 million is owed to a giant US group by a Bermuda company in controversial consultancy payments.

The amount emerged in a ruling from Chief Justice Austin Ward who was asked to halt the payments from Bermuda Cablevision to the Alabama-based McDonald Group.

It is feared the money might not be recovered if it leaves the Island and control of Cablevision changes hands following the end of a lengthy legal row.

The row centres around the control of Bermuda Cablevision (BCL) with the Bermuda Telephone Company challenging the TV company's structure.

Telco has mounted a legal challenge claiming Cablevision's structure breaches Bermuda's 60/40 rule -- where a company has to be at least 60 percent Bermudian owned.

It also claims consultancy fees paid by Cablevision to the McDonald Group under a deal worked out with the Bermuda Monetary Authority are also in breach of the rule.

The case is due to go before the Privy Council in England early next year.

In a bid to get the payments halted Telco, through a subsidiary called Colica Trust Company, went to Mr. Justice Ward.

Colica argued that since 1987, when the McDonald Group invested in Cablevision, the US company has been "handsomely rewarded' and that now the cash was "grotesquely'' out of proportion to the services it provided.

It also argued that money -- including the $5.5 million in arrears -- could not be recovered if it was allowed to leave the Island and Colica subsequently won the court case over control of Cablevision.

In the ruling it emerged that the BMA has to authorise each consultancy fee payment and that over the years $5.5 million in arrears built up, partly because the McDonald Group occasionally froze payments itself.

However Mr. Justice Ward said because the BMA had to approve each payment "there can be no genuine fear by Colica of a removal of monies from the jurisdiction''.

Mr. Justice Ward also noted that some of Cablevision's Bermudian directors had not objected to the payments.

"It would be closer to the mark to say that those directors who support Colica object to the payments.'' He said an idea to put the cash into a bank account in Bermuda until control of BCL was settled would also be unfair.

He added: "There is evidence that the McDonald Group invested some $8 million in developing the cable television system in Bermuda and that there was no dispute over the distribution of profits and dividends until BCL was brought by the Group's efforts to a high level of profitability.

"Moreover, the Group continues to provide services in the form of programming, negotiating with producers, servicing on equipment, technical construction and operation assistance.

"If BCL is restrained from paying its suppliers who provide the services, it seems unlikely that the services will continue to be provided.

"All viewers of the programmes would be affected if the service should be discontinued because of non-payment of fees.'' Mr. Justice Ward said the fees were paid under an agreement reached with the Bermuda Monetary Authority and that legal action over control of Cablevision could take years to complete.

He therefore ruled that until the control issue was sorted out the existing agreement should be kept and he dismissed Colica's case.

Last night Colica's lawyers William King, from King and Associates, and Mr. P.

Hoser, from England, were both in London and unavailable for comment. It is not known if they will appeal the decision.