AltaVista UK's managing director, Andy Mitchell, yesterday paid the price for the company's failed launch of an unmetered internet access service by tendering his resignation.

The announcement of Mr Mitchell's departure coincided with the closure of Ezesurf, which claimed to be Britain's longest established free call internet provider. The Dundee-based firm blamed a £1.7m bill for calls from internet service provider Energis Squared for its collapse.

AltaVista said that the problems with the launch of its service and the negative publicity that accompanied the fiasco had made 33-year-old Mr Mitchell's resignation "inevitable".

"The mistakes in our planned internet access service - which we do acknowledge - probably made Andy's departure inevitable," the spokesman said.

Mr Mitchell has been replaced with immediate effect by Stephanie Himoff, the head of business development, who joined the company six months ago from CMP Media.

Ms Himoff said that AltaVista would now be returning to its core business - search engine provision.

AltaVista was insisting as late as last week that subscribers were using a service that it had claimed, when it was launched amid a blaze of publicity in March, would revolutionise internet usage in Britain.

Then the company promised unlimited access to the web for just £60 a year, drawing praise even from the prime minister as a result.

Mr Mitchell confessed last week that the service - which more than 270,000 people had by that time signed up for - was not actually operating at all. He also admitted that he should have informed potential subscribers and his own superiors sooner.

AltaVista, based in Silicon Valley, California, blamed the failure on the high rates that BT charges for its domestic phone lines.

BT said AltaVista had not consulted it about the means by which it was going to provide the service before launching it to the media.

Ezesurf's managing director, Matt Bryson, announced the closure of the company in a 2,300-word statement on the company's website, and blamed a variety of people and situations for its problems. The monologue was later removed from the site.

The failure of the AltaVista and Ezesurf services illustrates the difficulty many internet service providers are experiencing in moving towards the unmetered access model pioneered in the US.

In Britain, home internet users have to pay local phone charges for each minute they are online. But in the US, local calls are included in a flat rate package supplied by the telecoms provider.

Analysts have repeatedly said that until the UK has unmetered access internet growth and usage will be restricted.