We propose a polarisation-maintaining NOLM switch design to be used as optical regenerator or wavelength converter in dense optical time-division multiplexed (OTDM) systems. The Sagnac loop is made of a piece of high birefringence fibre which is cut and crossspliced in the middle. If pump and probe polarisations are linear and aligned in the co-propagating direction, the cross-splice ensures that the counter-propagating probe beam will be orthogonal to the pump, so that the parasitic cross-phase modulation between counter-propagating beams is minimised. This architecture also allows easy control of the optical phase bias, through squeezing a short section of the fibre, without any other modification of the setup. The performances of the proposed architecture are studied analytically and numerically, and compared with those of conventional schemes. It appears that, although the proposed setup reduces the interaction between counter-propagating beams only by a factor 3, it yields an extinction ratio improvement of a factor 10 or higher in comparison with conventional schemes. If there is substantial walkoff between pump and probe, a 10-fold reduction of the relative intensity noise of the emerging signal is also obtained when the mark ratio of the incoming data is variable.