Nortel Networks Corp has sought legal advice to study a bankruptcy protection scenario in the event that its restructuring plan fails and has also been exploring potential assistance from the Canadian government, the Wall Street Journal reported.

On the subject of legal advice for studying a bankruptcy scenario, the WSJ cited people familiar with the situation, while on the potential government aid scenario, it cited a person familiar with the situation.

Nortel’s spokesperson said no bankruptcy filing was imminent though the Toronto-based company has engaged several advisors to plan ahead, the newspaper reported.

Nortel could not be immediately reached for comment by Reuters.

Nortel, North America’s biggest maker of telephone equipment has lost billions of dollars and cut tens of thousands of jobs since the technology bubble burst at the beginning of this decade.

The company has been unable to recover since then, with its problems exacerbated by the global economic slowdown.

RBC Capital Markets analyst Mark Sue said in November the company faced significant liquidity concerns, with bankruptcy a distinct possibility before 2011.

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