But the report, by the Trade and Industry Select Committee, is thought to favour only a phased lifting of the restrictions - starting in about two years - to give the cable television industry time to become established.
The report is likely to be a disappointment to BT which has carried out an intensive lobbying campaign at Westminster. The company wanted the MPs to give whole-hearted support to the early abolition of the Government-imposed ban that runs until 2001 with a review by the regulator, Oftel, in 1998.
The Committee's report is thought to propose a system under which the ban could exist in some parts of the country until the end of the decade.
In submissions to the the Select Committee's inquiry, cable industry executives had said that if the ban on BT were to be completely lifted in the near future, it would threaten investment plans to the end of 1999 of about pounds 10bn.
BT has argued that it is unfair to allow cable television companies to offer telephone services in their franchise areas while preventing it from providing entertainment over its network.
It claims it cannot embark on a pounds 15bn project to install a high-capacity telecommunications network throughout Britain without the returns it would get from new services ranging from interactive television to education, training and shopping.
The company is also angry at the perception of cable companies as small and new when they are in general owned by large foreign groups, many of them based in the US.
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