telephone service for Bermuda -- said yesterday it expects to win a US licence for its US-Bermuda telephone cable within the next ten days.

The news came as TeleBermuda said it had raised $18 million from investors for the project -- well short of the $30 million in shares it had offered to the public.

But TeleBermuda chairman Michael Kedar said the company had the money it needed to proceed and was in negotiations with a number of potential investors.

TeleBermuda's plans for a rival service to Cable & Wireless were threatened with derailment when American investors in Bermuda Cablevision asked the US State Department to block its application to the Federal Communications Commission to land a cable in the US.

The McDonald Group is locked in a legal battle for control of Cablevision with the Bermuda Telephone Company, which claims Cablevision's structure and consultancy fees, which pay McDonalds 60 percent of the profits, are in breach of Bermuda's 60/40 rule.

McDonalds claims the Bermuda Government approved the arrangement and asked that TeleBermuda be denied a US licence because American business interests in Bermuda are being unfairly treated.

As a result the State Department launched an inquiry, but Mr. Kedar said he was confident the company would be granted its licence.

Describing the McDonald effort as "bogus'', he said: "The complaint was made and that meant the State Department had to investigate. But the process with them ended on October 15 and we expect within the next ten days they will release a recommendation to the FCC to proceed with our licence.

"There is absolutely no doubt that there is complete support for our position and none for the McDonald's position. "This was a clear case of trying to use political influence for private gain. I have nothing against the McDonalds and don't even know them. But to put us in the middle of their dispute with Telco, which we have nothing to do with, was totally unfair, and we expect that it is being recognised as such.'' Meanwhile, Mr. Kedar said he was confident the company would raise the capital it needed to continue with the project.

TeleBermuda failed to raise the $30 million it sought in its initial public offering, netting just $18 million through private placement in the US, Canada and Europe, together with the IPO.