NOVELTY - Preparing cefaclor intermediate benzhydryl 7-phenylacetamido-3-hydroxy-3-cephem-4-carboxylate (I), comprises e.g. (a) esterifying potassium 3,3-dimethyl-7-oxo-6-(2-phenylacetamido)-4-thia-1-azabicyclo(3.2.0)heptane-2-carboxylate (II) and oxidizing in presence of a supported catalyst to obtain benzhydryl 3,3-dimethyl-7-oxo-6-(2-phenylacetamido)-4-oxo-4-thia-1-azabicyclo(3.2.0)heptane-2-carboxylate (IV), (b) reacting (IV) with trimethyl phosphite, (c) carrying out ozonization and enamination of obtained compound, and (d) brominating, and carrying out cyclization under acidic condition.    USE - The method is useful for preparing cefaclor intermediate benzhydryl 7-phenylacetamido-3-hydroxy-3-cephem-4-carboxylate (claimed).    ADVANTAGE - The method: utilizes cheap and easily available raw materials, and reduces amount of sewage discharge; is environmental friendly; produces product with purity of more than 98% and total yield of 77.6%.    DETAILED DESCRIPTION - Preparing cefaclor intermediate benzhydryl 7-phenylacetamido-3-hydroxy-3-cephem-4-carboxylate of formula (I), comprises (a) esterifying potassium 3,3-dimethyl-7-oxo-6-(2-phenylacetamido)-4-thia-1-azabicyclo(3.2.0)heptane-2-carboxylate of formula (II) with diphenyl carbinol in presence of methanesulfonyl chloride and pyridine to obtain benzhydryl 3,3-dimethyl-7-oxo-6-(2-phenylacetamido)-4-thia-1-azabicyclo(3.2.0)heptane-2-carboxylate of formula (III), and oxidizing (III) with 30% hydrogen peroxide solution in presence of a supported catalyst to obtain benzhydryl 3,3-dimethyl-7-oxo-6-(2-phenylacetamido)-4-oxo-4-thia-1-azabicyclo(3.2.0)heptane-2-carboxylate of formula (IV), where the supported catalyst is polyethylene glycol ether compounds of formula (X), (b) reacting (IV) with trimethyl phosphite to obtain benzhydryl 2-(3-benzyl-7-oxo-4-thia-2,6-diazabicyclo(3.2.0)hept-2-en-6-yl)-3-methylbut-3-enoate of formula (V), (c) carrying out ozonization of (V) in presence of ozone and trimethyl phosphite to obtain (E)-benzhydryl 2-(3-benzyl-7-oxo-4-thia-2,6-diazabicyclo(3.2.0)hept-2-en-6-yl)-3-hydroxybut-2-enoate of formula (VI), and carrying out enamination of (VI) with morpholine in presence of p-toluenesulfonyl chloride to obtain (E)-benzhydryl 2-(3-benzyl-7-oxo-4-thia-2,6-diazabicyclo(3.2.0)hept-2-en-6-yl)-3-morpholinobut-2-enoate of formula (VII), and (d) brominating (VII) in presence of bromine and N-methylmorpholine to obtain (E)-benzhydryl 2-(3-benzyl-7-oxo-4-thia-2,6-diazabicyclo(3.2.0)hept-2-en-6-yl)-4-bromo-3-morpholinobut-2-enoate of formula (VIII), and carrying out cyclization of (VIII) under acidic condition to obtain final product.    PEG = PEG4600 i.e. -CH2CH2-(OCH2CH2)n-; and    n = 104.