BT is planning to roll out fibre optic broadband to 10 million homes in a £1.5 billion investment programme.
The firm claims the investment will bring top speeds of up to 100 Mb/s and the future potential of 1,000 Mb/s to around 40 per cent of homes by 2012.
However, before the plans goes ahead BT is calling on assurances from the regulator Ofcom that "risk-taking can be appropriately rewarded".
To fund the scheme BT will suspend its share buyback programme that would have cost £1.8 billion.
BT chief executive Ian Livingston said: Broadband has boosted the UK economy and is now an essential part of our customers lives. This marks the beginning of a new chapter in Britains broadband story.
This is a bold step by BT and we need others to be just as bold. We are keen to partner with people who share our vision for the next phase of the broadband revolution.
"We want to work with local and regional bodies to decide where and when we should focus the deployment. Our aim is that urban and rural areas alike will benefit from our investment.