Liberty already has a major presence in European cable through its indirect control of Europe's largest cable operator, United Pan-Europe Communications NV. But the company's efforts to further expand into Europe has hit roadblocks from regulators. Earlier this year Liberty's attempts to gain control of big cable systems in Germany were stymied by regulatory opposition.

The Casema deal, originally announced in August, would have cemented Liberty's presence in the Dutch cable-TV market. Casema has 1.316 million subscribers in the Netherlands. Adding it to UPC's existing interests would have given Liberty nearly a 60 per cent share of the Dutch cable TV market, wsj.com has reported.

France Telecom said in a statement that it still plans to sell Casema and has already entered discussions with other possible buyers.

Liberty is seeking to build a network of European cable systems similar to Malone's TCI in the United States before he sold it to AT&T.