LONDON -- Cable & Wireless announces today that it has reached agreement with the Inland Revenue to settle the Group's outstanding UK Corporation Tax Affairs for the ten years up to 31 March 2001. This agreement involves the payment today by the Group of £380 million to the Inland Revenue in respect of all previously unsettled matters for this period. On 13 January 2003 Cable & Wireless paid £1.5 billion into escrow for the benefit of T-Mobile Holdings Limited, a subsidiary of Deutsche Telekom, pursuant to an obligation in a tax indemnity given to Deutsche Telekom by Cable & Wireless at the time of the disposal of One2One in October 1999. As a consequence of this settlement with the Inland Revenue the Company expects the release of the £1.5 billion currently held in escrow shortly. Richard Lapthorne, Chairman of Cable & Wireless, said “Establishing clarity over the Group’s tax position was an essential element in our planning for the future financial shape of the Group. With the settlement in place and consequent anticipated release of funds under escrow we now expect to have a firm financial base for securing the future of the Company”. In a separate release:Standard & Poor's Ratings Services said today that its ratings on Cable & Wireless PLC (C&W; BB/Negative/B) remain unchanged, following the announcement that the company expects £1.5 billion ($2.4 billion) of its funds held in escrow to be released shortly. This results from the settlement of C&W's U.K. corporation tax affairs for the 10 years to March 31, 2001, and the consequent expected release from an obligation in a tax indemnity given to Deutsche Telekom AG (BBB+/Stable/A-2).The return of these funds will significantly improve C&W's near-term liquidity. Nevertheless, C&W still faces significant execution risks associated with restructuring the C&W Global division to reach free cash flow breakeven, and building a sustainable enterprise. Standard & Poor's near-term analytical focus will be on C&W's progress in restructuring the Global business and improving group operational performance and free operating cash flow.Cable & WirelessStandard & Poor’s