British Telecom has offered to pay the pounds 15bn to pounds 20bn cost of the infrastructure, but only if the Government removes restrictions in its licence which prevent it from delivering entertainment services - a potentially lucrative new market in television and video broadcasts - over its telephone network.
The Trade and Industry Select Committee proposed lifting the ban on BT, and the Labour Party has said it would loosen the restrictions.
The Government's attitude will be crucial in determining how fast Britain takes up the challenges of the information superhighway.
Bruce Bond, managing director of national business communications for BT, questioned the limits to BT's licence, which the Government has said are aimed at promoting competition between BT and the cable companies.
'Anyone that tells you this beast is going to be built by cable TV companies simply doesn't understand what's going on. BT has the technology, the vision and the money. It seems to me bizarre that the country would embark on a project with such a core role in its future and not ask us to be a part of it,' Mr Bond said.
Robin Cook told yesterday's meeting that there was no longer any logic in telling BT it was a telephone company and could not compete in any other media. 'Britain is proceeding on the basis of the franchises given to cable television companies, which are 80 per cent US-owned. If you were serious about getting the technology right you ought to be doing everything possible to encourage your own telecommunications companies to play a full part.'