The telecoms operator said that it would provide broadband rivals, which have long complained over its infrastructure stranglehold, with "the confidence they need" through concessions including lower charges for the accessing the local loop- the last mile of copper wire connections linking customers to exchanges.

Access to the wires, over which BT inherited monopoly control with its privatisation in 1984, has become a key industry battleground, with rivals complaining over charges and the small number of lines opened up, or "unbundled".

Of the 25 million BT lines connecting houses and businesses to exchanges, just 26,000 had been unbundled by last December, although Ofcom expects there to about 1 million freed up by the end of next year.

However, while BT today proposed further price cuts to unbundled lines - after discounts of up to 70 per cent agreed with Ofcom, the industry watchdog, two months ago - it said that the reductions were dependent on a "speedy and satisfactory conclusion" to a regulatory review.

Ofcom is in the closing stages of an investigation into the telecoms industry which the regulator said in November could mean referral of the market to competition authorities, a move which it is widely expected would lead to the break-up of BT.

BT warned today, however, that too brutal a conclusion to the report could threaten plans for building a so-called 21st century network, costing £10 billion, over the next five years.

"The plans, which would bring substantial benefits to the UK, are dependent upon BT receiving assurances it can generate appropriate economic returns from its investment," BT said.

The company also proposed establishing a division, entitled the Access Services unit, to help ensure that "every operator is treated equally".

"This 'fenced off' part of the business would remain within BT and would have responsibility for ensuring equal access to the services and assets associated with the local loop, the copper wires that run between telephone exchanges and households," BT said.

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