Troubled telecommunications company, WorldCom has announced that the US Bankruptcy Court has approved its bankruptcy motion.

WorldCom, the US telecoms giant, became the biggest bankrupt in history today, but the company’s chief executive said it would have no effect on the company’s customers.

WorldCom is planning to file for bankruptcy protection, according to its chief executive.

WorldCom Inc bank lenders have failed in their efforts to recover the $2.65bn (€2.67bn) they were owed by the company after a New York judge rejected their request to impose a temporary restraining order against WorldCom, the Financial Times reported in its online edition, citing sources.

A group of 25 banks are claiming WorldCom defrauded them out of nearly $2.5bn (€2.5bn).

WorldCom's former chairman has refused to answer questions from a congressional panel investigating accounting irregularities at the company.

The chairman of the US Securities and Exchange Commission condemned as ‘‘wholly inadequate and incomplete’’ a sworn statement by WorldCom explaining how the US telecoms giant came to inflate its earnings by $3.8bn (€3.87bn).

US regulators have given WorldCom until Monday to provide details of how €3.8bn of expenses were hidden from shareholders.

Three WorldCom bosses have been ordered to testify at a Congressional hearing to investigate how the telecom giant inflated its profits by €3.8bn.

WorldCom's €5.53bn accounting scandal could be the "tip of the iceberg," an expert in commercial fraud litigation has suggested.

An investigation by US telecommunications giant WorldCom’s board of directors uncovered nearly $3.8bn (€3.83bn) in improperly booked expenses, the company said, revealing what appears to be among the largest cases ever of accounting fraud.