High-speed broadband connections could be extended to more than 93% of the population with inexpensive modifications to the existing BT network, the company has told ministers.

As it continues talks with communication minister Lord Carter ahead of his Digital Britain report next week, BT is also understood to have warned that relying upon the UK's five mobile phone networks to extend broadband risks harming competition and would only be a stop-gap measure.

Lord Carter made getting broadband - of at least 2Mbps - to everyone in the UK within the next three years one of the ambitions of his interim Digital Britain report in January. Regulator Ofcom estimates that only 85% of the population can get that sort of speed, leaving about 1.5m homes out of reach, in most cases because they are too far from their local telephone exchange.

BT has told Lord Carter it can raise coverage to 93% through improvements to people's home wiring and the recent introduction of ADSL2+ technology.

In the longer term, BT believes new technologies can be used to upgrade existing phone lines. This involves connecting homes with a second phone line and tests have shown it can achieve 2Mbps over a 17km long phone line - more than twice the distance at which speeds currently dip under 2Mbps. Satellite broadband would connect very remote areasgiving access to the remaining 7% of the UK population by the government's target of 2012.

Lord Carter has been looking for mobile broadband to fill the gap. He set his lieutenant Kip Meek the challenge of thrashing out a deal with the UK's five mobile phone networks that would allow them to use their existing spectrum for mobile broadband and free up part of the airwaves to be released when the analogue TV signal is switched off so it can also be used.

But Meek's plan, announced in May, has hit a stumbling block with the mobile phone companies arguing over the fact that Vodafone and O2 can use part of their existing spectrum for mobile broadband before the analogue TV signal becomes free.

But a BT insider, who has been working with Lord Carter's team, argued today that "investment needs to be directed towards the most efficient solution and away from giving the mobile operators an unjustifed subsidy. The fixed line network not only provides the best solution, it is also open to all operators on an equal basis thereby fostering competition rather than strangling it."