US authorities last night cleared the way for a new telephone cable to be laid between North America and Bermuda in a ruling that will come as a blow to a US group.

The State Department gave authorisation for a cable landing licence for TeleBermuda -- one of the companies moving into the Island's telephone business since it was opened to greater competition.

However the announcement will be a blow to the McDonald Group which had used the licence as leverage in its on-going battle for control of Bermuda Cablevision (BCL).

It is also a vindication of the Bermuda Government's stance in refusing to become involved in the dispute over BCL.

Yesterday TeleBermuda chiefs were delighted by the State Department ruling and were confidant it would soon get the cable underway.

"The last major obstacle has been removed with this approval, affording Bermuda a new high speed fibre optic access ramp to the 21st Century global information highway,'' said Mike Kedar, TeleBermuda's president.

TeleBermuda became embroiled in a dispute between Alabama-based cable TV company the McDonald Group and the Bermuda Telephone Company over control of BCL.

Telco claims BCL's set up is in breach of the Island's 60/40 rule and is fighting a court battle for control of the company.

The McDonalds say the set up was approved by Government in 1987 when the group invested about $8 million in setting up BCL.

It wants Government to publicly state it approved the deal -- ending the legal dispute which will reach the Privy Council in England next year.

Through Alabama Senator Richard Shelby it also called for the State Department to withhold TeleBermuda's cable licence until the row had been solved.

However a US State Department letter about the licence application says: "The Department of State has examined the application, its amendments and filings at the Federal Communications Commission.

"The Department also reviewed a request filed on October 4 by the McDonald Group that the Department withhold approval of the licence application until such time as McDonalds' pending business dispute in Bermuda is resolved.

"Following a public comment period between September 27 and October 15 on the McDonald request, the Department reviewed all comments received during that time period. Having completed our review, the Department approves the granting of the licence to TeleBermuda.'' Last night US Consul General Robert Farmer, who has been fighting in the McDonalds' corner, was not available for comment. Neither was a spokesman for the McDonald Group.

But Finance Minister Grant Gibbons, who maintained that Government would not get involved in the legal dispute between Telco and McDonalds, said it was "most unfair'' for the issue to be broadened to include TeleBermuda.

He added: "There have been some discussions between the State Department and the Government. They were looking for clarification on particular issues concerning McDonalds.

"The Bermuda Government has felt from the beginning of this issue that it was not a matter for Government to get involved in.'' Meanwhile TeleBermuda has applied to set up a 30-foot satellite dish on Kindley Field Road which will link Bermuda to both sides of the Atlantic.

It will enable the company to start offering its services and is its initial capacity until the cable link with the US is ready.

COURTS CTS