Due to the attribute value normalization the telnet session failed with the Internet Explorer browser.
As determined by the recommendation at w3.org (ref) all line-breaks in attribute values should be normalized to #xA.
Unfortunately our objects..
Used the <CR><LF> before setting it to the xml attribute wich results in malfunction of multi-line telnet sessions. Rethinking the configuration resulted in the obvious solution wich is applied to the server-side script. By trimming the telnet command and adding a <CR><LF> to it before sending it to the server solved the problem.
Browsers
The problem was detected with IE wich is conform the w3 recommendation. Scripts are mainly tested with the mozilla browser as it has good support for javascript debugging.