Nortel Networks Corp. has received offers worth close to $1-billion (U.S.) for one of its divisions, but continues to weigh alternatives before making a deal.

The company is still trying to determine whether its best route to profitability would be to sell more than its Metro Ethernet unit, which officially went on the block in September.

The three offers on the table for the Metro Ethernet division are close to analysts' earlier estimates of up to $1-billion, The Globe and Mail has learned. The unit accounted for 13 per cent of Nortel's $7.7-billion in sales in the first nine months of the year.

Analysts have feared that the longer Nortel takes to sell the unit, the less money it will reap in a rapidly deteriorating market. Maryland-based rival Ciena Corp. for example, saw its shares fall 20 per cent this month after announcing disappointing results and guidance. But the three offers appear to have locked in a price for the moment.

Nortel executives have been criticized in the past for acting too slowly. Their hesitancy today relates to finding the best way to raise cash as the company struggles to cut costs and stem falling sales in time to manage its next round of debt financing in 2011.

In addition to selling the Ethernet unit, which includes Nortel's cutting-edge optical Ethernet products, the company is considering selling its carrier networks division, which sells gear to phone companies, and even its enterprise division that sells to businesses.

Management has had discussions with both the Department of Finance and Industry Canada about throwing a lifeline to the company but Ottawa has not made a decision. “It would be inappropriate for the Government of Canada to comment,” said a spokeswoman for Industry Canada.

Executives have also tried to smooth the way in both Ottawa and Washington for any offer coming from China's Huawei Technologies Co. Ltd., which would like to buy the entire company. Both governments have concerns about putting contracts for their communications in Chinese hands. Early this year, the U.S. blocked Huawei's attempt to purchase 16.5 per cent of network equipment maker 3Com Corp. through a partnership with Boston-based Bain Capital Partners.

Nortel's chief executive officer, Mike Zafirovski, is a member of U.S. President George Bush's National Security Telecommunications Advisory Committee, which complicates any relationship with Huawei.

Ottawa could choose to help Nortel in more ways than just a bailout. One option, not yet discussed, involves letting the company borrow against past research and development tax credits that Nortel has not been able to claim without profitability.

Nortel has consistently spent more on research and development than any other Canadian company. In 2007, it spent about $1.85-billion, more than half-a-billion more than second-place BCE Inc., and more than seven times the spend of Research In Motion Ltd.

The pool of banked R&D credits accumulated by companies across Canada poses an increasing liability for the government because the Department of Finance doesn't know when and at what rate they will be claimed. Letting companies like Nortel use the credits as collateral for government loans, in return for reducing the pool, could benefit all parties, some experts say.

The companies most frequently said to have an interest in Nortel assets are: Nokia Siemens Networks, Telefon AB LM Ericsson, Huawei and Cisco Systems Inc. Rivals Alcatel-Lucent and Motorola Inc. are considered less likely bidders because they are struggling with their own problems.