C AND W OFFERED ROLE IN NEW JAPAN TELECOM COMPANY A Japanese businessman announced plans for a new telecommunications firm in which Britain's Cable and Wireless Plc would be a core company. However, the plan, unveiled by senior Federation of Economic Organizations official Fumio Watanabe, does not specify what stake Cable and Wireless would have. "The share holdings of the core companies should be equal," Watanabe said in a statement. "The actual percentage of shareholdings should be agreed by the core companies." He said the eight core companies will provide directors for the firm. "The new company shall immediately set to work on the feasibility study of constructing a new cable for itself," Watanabe said. Watanabe has acted as mediator between two rival groups, one of which included C and W, seeking to compete against <Kokusai Denshin Denwa Co Ltd>, which now monopolizes Japan's overseas telephone business. The Post and Telecommunications Ministry has said it wants only one competitor to KDD and has backed Watanabe's efforts. A British source, who declined to be identified further, said the proposals could open the door to further talks between C and W <CAWL.L> and the other firms involved. C and W had earlier rejected a reported proposal which would have given it a five pct share in the new telecommunications firm, compared to the less than three pct stake Watanabe originally proposed. C and W has a 20 pct stake in one of the two firms Watanabe has proposed should merge. The British source said the decision not to specify the exact shareholdings of the core companies could leave the door open for further discussion. "It's probably a sensible approach on their part," the British source told reuters. C and W has also been pushing hard for permission to lay a new cable between Japan and the U.S. The proposed merger has sparked an international row, with British government sources threatening retaliatory action against Japan for what they see as discriminatory practices against foreign firms. The sources said last Friday that one option for Britain would be to revoke licenses of Japanese banks and securities companies operating in London. The U.S. Has also attacked the original merger plans, saying that both rival consortia should be licensed. Asked about participation by other U.S. And European firms, Watanabe said, "They will not be core companies but if they wish they could participate." Under the Japanese law, total foreign participation would be limited to one-third. "It might be wise for C and W to join the new firm which has the support of many influential backers and work within this for the realization of their ideas," Watanabe told reporters. The other core firms are Mitsubishi Corp <MITT.T>, Mitsui and Co <MITS.T>, Sumitomo Corp <SUMT.T>, Matsushita Electric Industrial Co <MC.T>, Toyota Motor Corp <TOYO.T>, C Itoh and Co <CITT.T>, and <Pacific Telesis International Inc>. Watanabe said that his latest proposal represented his final effort. If it fails to satisfy the British government, it will be up to the Japanese government to explain its position, he said.