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Broadband providers have been asked to sign up to a new industry code to provide more honest internet speeds to customers.

Regulator Ofcom found consumers could be misled or misinformed when choosing their broadband services by ISPs advertising headline speeds that are higher than users can receive in practice.

In a deal with Ofcom and 32 internet service providers (ISPs) a new code of conduct will be established for the industry. The regulator will also be undergoing a national investigation into broadband speeds.

Under the new deal ISPs will provide customers with accurate estimates of their maximum speed when they buy.

Also if internet speeds advertised do not live up to expectations, consumers will be allowed to switch to lower speed, and cheaper, deals.

Clearer information on usage limits will also be provided.

"The ball is very much in the ISPs' court for them to meet the spirit and the letter of the code," a spokesperson for Ofcom said.

Firms have six months to adhere the code – at which point Ofcom will conduct mystery shopper research to ensure the plans are being met.

If the broadband firms fail to meet the demands of the code, Ofcom has warned it will introduce mandatory regulations – as it has done for the sale of mobile phones when a voluntary code failed to change poor sales practices.

Ed Richards, Ofcom's chief executive, said: "Broadband is a thriving market in the UK. We want to encourage real clarity for consumers about the actual broadband speeds they can receive. This voluntary code is a significant step in this direction."