The British government is to halve the cost of Internet access - in a bid to boost the nation’s flagging e-commerce performance, claims a Financial Times (FT) report.

The report states that Chancellor of the Exchequer, Gordon Brown, believes high telephone charges are causing British companies to lag behind their American counterparts in the e-commerce stakes.

Mr Brown will give details of the charge-cutting move in a speech to financiers in London tonight, reveals the FT.

A British Telecom (BT) spokesman made light of the story, telling Macworld that “if it’s the first we’ve heard of this, then it may be the first Mr Brown has heard of it”.

Asked for BT’s likely reaction should Net access costs be halved, the spokesman said: “We don’t live in a world of hypotheticals.

“We will wait and see what Mr Brown has to say tonight.”

The government plans to cut charges by opening up BT’s “local loop” – the copper wiring between the digital network and home and business phone lines.

Oftel, the UK telecommunications watchdog, has already agreed to open the local loop to BT’s business rivals by July 1 2001. Mr Brown has now agreed with Oftel to bring this date forward, claims the FT.

Internet connection charges in Britain can be twice those in the US. (see "BT's new Net-rates 'too high' - AOL"). This is cited by e-commerce analysts as a major reason for why just a tenth of British businesses sell online, compared to half of US firms.