The scheme, covering 90 per cent of the Greater Manchester population, is by far the largest municipal wi-fi project envisaged in the UK. It has been inspired by programmes in San Francisco, Seattle and Amsterdam, which provide free internet access across large urban areas.

Manchester will argue that the scheme, which will cost tens of millions of pounds, will stimulate the local economy, especially very small businesses, and tackle Britain’s growing “digital divide”.

The council will invite potential commercial partners to submit plans on how they might take part by January 8. Groups including The Cloud, Pipex, BT, easynet and Metronet are understood to have held early talks.

A council spokesman said: “This will be a transparent debate on how best to replace our 19th-century infrastructure.”

It aims to have a pilot scheme in place by next summer, funded by a combination of public and private money. Manchester also hopes to win £3 million in initial funds through the Government’s Digital Challenge Initiative, a scheme put in place to counter “digital exclusion”.

The most likely model is San Francisco, where Google has offered to fund basic wi-fi internet access provided by the operator EarthLink. Manchester has been in touch with the American project, which will supply coverage through a “mesh” of small transmitters hidden in fixtures such as lampposts. One plan mooted in Manchester would involve a commercial partner offering similar free low-speed 256k connections to everyone inside the project’s boundaries. Such speeds would support basic services such as internet telephony. The partner would then have the option of recouping costs by charging users for the higher speeds necessary to download films or large files quickly. The network could also be used to broadcast highdefinition television.

Large-scale wi-fi networks are set to become a feature of large cities in the next few years. Eight other councils, including Birmingham, Cardiff and Glasgow, are already working with BT’s Wireless Cities programme under which BT will roll out paid-for services. Negotiations are continuing, but council partners have the option to offer “walled garden” networks under the project, where residents or council workers can get free access. Milton Keynes, Norwich and Leicester Square in London have free wi-fi systems in place funded through public money and commercial sponsors.

Similar schemes have raised objections from incumbent providers in American cities, and Manchester already has six groups offering paid-for wi-fi access. However, UK operators have so far shrugged off suggestions that free services will damage their businesses, branding the plans financially naive.

Jay Saw, UK hotspot manager for T-Mobile, the world’s largest wi-fi provider, said: “We are not convinced that blanket coverage across large metro areas makes commercial sense. San Francisco has Google, which have a lot of money and wants to be associated with building a network in its back yard . . . But lots of hotspots don’t see as much revenues as you might imagine.”

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