BT Global Services, the IT arm of the telecoms firm, has narrowed its quarterly losses from £35 million to £25 million in the three months to 31 December.

The news comes amid cost cutting at the division, whose parent BT saw group profits rise 48 percent, to £652 million.

BT Global Services made no mention of one of its largest contracts, a £1 billion deal with the NHS for the now-cancelled National Programme for IT. Work is continuing with some trusts, and 19 already run its systems, but a BT spokesperson was not immediately able to say what will happen to the planned future work.

The lack of mention contrasts sharply with recent financial results from CSC, the other lead provider on the programme.

In December, CSC reported a £960 million writedown on the programme. Part of this is because CSC has invested heavily in the programme, yet only delivered patient administration systems to a handful of trusts. It is no longer expected to deliver the systems to a significant number of the trusts originally contracted.

It is not known when BT will announce more details around its NHS work, or the potential financial impact of the end of the programme.

Revenue for the Global Services division decreased four percent to £1.9 billion, on the back of the group having hit a number of milestones in key contracts during previous quarters - releasing payments before the current period.

It did, however, sign new deals in the quarter with Sainsbury's, Standard Life, Staples, Eni Group, Bristol-Myers Squibb, Deutsche Post DHL and the European Parliament.

Speaking on the group results, BT chief executive Ian Livingston said: "We have delivered another quarter of growth in profits and cash flow despite the economic head-winds."