The Foreign and Commonwealth Office signed a £165m, 10-year deal with Global Crossing in May 2000, but has admitted in a parliamentary written answer that it is studying contingency plans as the company prepares to sell parts of its network to raise funds.
Global Crossing, which went into Chapter 11 protective bankruptcy earlier this year, has connected only 100 embassies to its network. The remainder were due to be linked up this year.
Global Crossing has put its UK operations on the block, and this week said it had 19 potential suitors for its Asian assets.
The Home Office could also be facing embarrassment about the future of Global Crossing. The bankrupt telco is a key sub-contractor in the £360m IT2000 infrastructure contract headed by Fujitsu Services.
The Department of Environment, Food and Rural Affairs could also be looking for a new partner. It is halfway through a three-year, £5.5m deal with Global Crossing to provide wide area data networking services.
The uncertainty surrounding Global Crossing has not only affected the British government. Last week the US Department of Defense (DOD) announced it was switching a 10-year, $310m contract to build a secure telecommunication system for the Defense Information Systems Agency from Global Crossing to WorldCom.