A Hong Kong-based investor has agreed a HK$9.2bn ($1.2bn) deal to buy Richard Li’s controlling interest in PCCW, the leading domestic telco in the region.

Mr Leung announced the deal last night, ending speculation about the sale of PCCW which has been the subject of a bidding war between TPG Newbridge and Macquarie Bank.

The deal will please the Chinese government which controls China Netcom, a 20 per cent owner of PCCW. The Chinese have made no secret of their desire to keep PCCW linked to a home-grown investor.

The sale effectively releases Li from six years at the company.