Wavelength-division multiplexed networks using wavelength-routing are considered to be potential candidates for the next generation of wide-area backbone networks. In these networks, messages are carried in all-optical form using lightpaths. ATM is a widespread architecture and it is natural to extend the two-level connection architecture of ATM to the three-level connection architecture of optical-ATM networks. The three-level connection architecture is realized by providing a LP network under the virtual path network, to meet the bandwidth requirements of the virtual paths (VPs). Fault handling in these networks is of prime importance due to the nature and volume of trafยฎc that these networks carry. Faults can be handled by rerouting the failed LPs in such a way that, failures are transparent to the VPs at the upper layer. Our work aims at designing a LP network with fault tolerance capability for an ATM network with an underlying optical layer. The primary network is designed with the objective of minimizing the number of ยฎbers. The restoration network is designed to survive single link failures with the objective of minimizing the number of ยฎbers. We develop design methods based on heuristics, and verify their effectiveness through simulation experiments.