Tony Blair's vision of a Britain where people can surf online for free for as long as they want moved a significant step closer yesterday when the cable company NTL announced plans to offer free unmetered access to the internet.
The move from the American company follows sustained pressure from the government to lower the cost of using the net and was welcomed by Mr Blair. It is also likely to spark a price war among the major internet access providers that will cause the biggest shake-up yet experienced by the nascent web industry and from which the consumer is poised to be the eventual winner.
High call charges - or "bill shock" as the industry describes the reaction when customers see what their internet calls have cost - are often identified as one of the major barriers to people, particularly those with low incomes, from using the net.
ntlworld will be launched on April 17 for internet access by personal computers, with web access through the television coming soon after. Homes with direct links to NTL cable will gain access as part of a £9.25-a-month telephone and TV package.
Customers on other networks, such as BT, will pay a one-off £10 fee for a line adaptor and then pledge to spend more than £10 per month on NTL voice calls.
Barclay Knapp, chief executive of NTL, said: "ntlworld will help the UK in a drive to lead the world in making e-commerce, e-entertainment and e-education available to everyone."
Mr Blair, speaking at an internet conference yesterday, reiterated his desire to see internet costs cut to help the UK keep up with the online world and get all Britons on to a "people's internet" by 2005.
"Our goal must be to see prices comparable with anywhere in the world, including the US," he said.
Mr Blair fears that unless call charges are cut, Britain will lag behind as the "new economy" develops and the internet could become the preserve of the wealthy and highly educated.
His message appears to be getting through to leading net providers. AltaVista, the US search engine, said on Monday it would offer unmetered access for an initial signing-on fee of up to £50 and an annual renewal fee of between £10 and £20.
Established companies such as Freeserve, the UK's largest internet service provider, and AOL, its biggest rival, are examining ways of matching their rivals to protect their market position. Freeserve, which relies on telephone calls for much of its revenue, has most to lose from the move towards unmetered access. Yesterday its shares fell 19% to 712.5p, wiping £1.7bn off its value, as the stock market reacted to NTL's move.
A recent report by the internet specialists Durlacher said unmetered access in the UK would treble the time people spent online.
The cable company Telewest was overwhelmed by demand when it launched its "unmetered package" last month and has since been forced to limit the number of subscribers it is signing up.
Mary Martin, a 33-year-old freelance sound recordist from Bristol, spent most of yesterday logged on through Telwes while she was building a web page for a musician friend.
"I've been online pretty much since I got up this morning, done a lot of work and not once worried about the cost," she said. "Cost was definitely one of the reasons stopping me from doing more on the net."
In most European countries, the big telephone companies provide web access for the general public.Britain's web sector is unique - partly because BT failed to act and let in rivals such as Freeserve and AOL.
But it is the American model that Britain is seeking to emulate. Average internet usage in the US is twice as high per person as in Britain.
Andrew Mitchell, AltaVista's UK managing director, de scribed his company's offer as a "kick-start" to the UK industry. "What we need is predictable, understandable and clear charges," he said.
Despite the move towards free calls, City analysts believe many consumers will still pay subscriptions for access to guarantee better reliability and high quality content.
Ajay Chowdhury, managing director of LineOne, which has around 800,000 customers, said: "Internet users have a variety of different tastes so internet providers will make available a selection of different flavours to match their appetites."
Teething problems included AOL Europe being overwhelmed by calls yesterday after a portion of its 0800 network went down.
