Virtual path and virtual channel management are very important to ATM networks. By using the VP concept the virtual layout of the network can be modified to improve the utilization of the network. With large bandwidths freely available the existing VP management strategies need to be modified. One of the problems that may arise as a result of this is that the number of connections supported by the link, does not scale proportionately with increase in bandwidth. The number of VCs is limited by the size of the VCI. The connection routing tables in a switch may overflow which would result in unused bandwidth. The existing VP layout algorithms can handle this problem but they suffer from the following deficiencies. They are, 1) Time-driven, 2) Their effect is global and, 3) They are generally centralized. In this paper we have discuss the issues regarding this problem. We first study the switch routing table design issues and how they can handle these problems to some extent. We then present a distributed algorithm to dynamically reduce the number of connection table entries in an ATM switch. © 1999 IEEE.