The newspaper quoted Disney's top lobbyist, Preston Padden, as saying that his company would present a detailed plan to the Federal Communications Commission next week, suggesting how to "separate content and conduit" in the AOL-Time Warner merger. That will effectively mean that time warner would have to spin off its cable television networks, the Post said. "We weren't sure we could even think of all the technically sophisticated discriminatory things they could do," Padden told Washington Post reporters and editors in an interview.

Government regulators, who are widely expected to approve the merger, have given no signals that they would consider imposing such radical stipulations. Time warner spokesman Ed Adler called the Disney proposal `absurd' and said there was, "no basis for any conditions on the merger," according to the Post. Padden told the paper that Disney was concerned that AOL and Time Warner could use their vast resources to dominate the emerging field of interactive television - a business of intense interest to Disney.

Time Warner officials say that Disney itself does not separate ownership of distribution lines and content, noting that about 69 per cent of the Prime-time programming on the ABC network, a unit of Disney, is Disney-owned, and Disney often takes an equity stake in content it broadcasts.

Time Warner also said that under the standard proposed by Disney, Disney would not have been able to take over ABC in 1995. But Padden said that argument would apply only, "if this was still a world where there were only three television networks," that would constitute a `bottleneck' to distribution, similar to single cable lines into homes. The 183 billion deal between AOL and Time Warner, announced in January, has been approved by both companies' shareholders, and is under review by the FCC, the Federal Trade Commission and the European Commission. Company officials say they expect the merger to close by this fall.