After more than a year of industry wrangling, telecoms regulator Oftel has moved a step closer to forcing British Telecom to open up its telephone exchanges to high-speed internet network operators.

Under Oftel proposals announced yesterday, operators offering an internet service - leaving BT to continue providing a voice service - will see the annual rent they pay for access to BT's local exchanges halved to £68. One-off connection charges will also fall from £141 to £127.

Many operators dismissed the move - which the government hopes could revive chances of Britain becoming a European hub of internet traffic. Oftel director general David Edmonds said: "We believe BT's proposed charges are too high and do not reflect the costs incurred.

"Oftel now intends to reduce BT's charges for shared access to the local loop for operators that only want to provide a DSL [digital subscriber line] service without voice calls."

"Unbundling" the BT local loop of copper wires linking exchanges to homes has long since been blamed for the impasse on high-speed internet access roll-out. It is the key to providing internet surfers with competitive prices because it will allow operators to offer services to homes and businesses without any BT involvement.

Several operators suspect BT has dragged its feet during unbundling negotiations because it is reluctant to face competition. Many of the 40 companies who expressed interest in more than 2,000 BT local exchanges, have turned to alternative means of provision.

BT has just nine companies interested in 1,200 exchanges, but denied the decline in demand was a result of BT filibustering the unbundling process.