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"It is not for government to tell business how much and where to invest in next-generation broadband," says the Department for Business.

Although the government will not force BT to invest in the technology, it still believes that it is important for future of the UK economy.

"However, it is right that we discuss with industry, and with the regulator, how the right environment can be created that will persuade them that such investments are timely and efficient," continues the statement.

The competitiveness minister, Stephen Timms, organised a broadband summit last year to discuss possible future investment with telecoms executives,

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and even suggested that the government could partly fund high-speed cabling to the home.

"I'm encouraged that companies such as BT and Virgin are taking important first steps to upgrade their networks and offer faster broadband to their customers - both residential and businesses. If we stall in putting this new network into place, it could be a barrier to the future success of our economy," says Timms.

Earlier this week, BT announced details of its installation of fibre optic cabling to new homes in the Ebbsfleet Valley development in Kent. Under the plan, 10,000 new homes will be provided with a theoretical maximum broadband speed of 100Mb/sec.

BT says that it would consider doing the same with all new housing developments, but has resisted wide-scale investment in fibre optic cables to the home, claiming that the investment will primarily benefit ISPs.

Rather than fibre optic installation, BT has been focusing on its 21CN network, which is based on existing copper infrastructure and will provide a maximum data rate of around 22Mb/sec.