LANCASHIRE tour operator MyTravel has earned crucial breathing space in its battle for survival, after securing new terms on £221.6 million of debt.

The troubled holiday giant has been given an extra three years to pay off the debt to bondholders, who overwhelmingly approved the deal at a meeting in London.

MyTravel -- formerly known as Airtours -- needed their agreement so it could have more time to turn around the loss-making business.

The company, which employs more than 400 people at its sites in Accrington and Helmshore, slumped into the red last year after being hit by the impact of September 11 and accounting problems.

Banks had already signed a similar £1.3 billion refinancing deal and backed the terms of the proposal to bondholders.

The agreement comes less than a month after it emerged chief financial officer Kazia Kantor had stepped down. She has been replaced by John Darlington, whose portfolio of trouble-shooting work includes the Millennium Dome and drinks company Bulmer.

MyTravel said in August that it continued to be hit by trading pressures, with prices achieved over the summer being lower than expected.

Cost overruns at its airline MyTravelLite, coupled with difficult market conditions in Scandinavia and North America, have also hit figures.