Millions face an annual increase of more than £30 for broadband over the next three years because of BT price rises, it is claimed.

The wholesale charge that BT imposes on rivals to run internet and telephone services via its network is to soar by more than 35 per cent by 2012.

The increases could mean up to 800,000 households will effectively be priced out of home broadband despite Government policy of broadband access for all income groups.

Up to 800,000 households could effectively be priced out of home broadband as BT charges rise.

The warning is based on a study by Dr Chris Doyle of Warwick Business School, who argues BT is effectively profiteering by pushing up the cost of broadband.

His work was financed by Carphone Warehouse, which offers the TalkTalk internet service via BT's existing network.

BT plans to put up the wholesale cost of broadband from £81.69 a year per home to a maximum of £91 in April - an 11 per cent rise.

The industry regulator, Ofcom, has indicated it will allow BT to charge £112 a year by 2012 - a rise of 37 per cent on today's figure.

'BT is very inefficient, or it is exaggerating its costs, or it is deliberately being allowed to make excess profits,' Dr Doyle said.

BT said: 'The UK has the most competitive broadband market in the world, thanks in large part to the massive investment made in broadband infrastructure by BT.'

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