Millions of homes are expected to be denied superfast internet access for at least a decade because of a failure to reach agreement across the communications industry over who should pay for the upgrade.

The Prime Minister promises in The Times today that the Government will help the private sector to move “farther and faster” to provide the next generation of superfast broadband, and the aim is that all households should enjoy broadband speeds of 10 megabits. But today Lord Carter of Barnes, the departing Communications Minister, will promise only that all households will be able to get a minimum standard speed of 2 megabits.

It was known already that the 2-megabit proposal would be partfinanced with £200 million, taken from a BBC-run scheme to help the elderly and vulnerable to change from analogue to digital television.

Lord Carter’s Digital Britain White Paper will reveal that the Government has been unable to strike deals with any of the main players on key elements of the digital strategy, including:

— a plan to take millions of pounds from the BBC licence fee to subsidise other media activities, including ITV’s regional news and local newspapers;

— the merger of BBC Worldwide and Channel 4;

— who will pay for fibre-optic connections across the country;

— the release of mobile radio spectrum by Vodafone and O2 for new national wireless broadband.

Instead, there will be only a modest package of initiatives and tax breaks to help BT and Virgin Media to extend faster, fibre-optic connections around the whole country — connections that could handle simultaneous channels of high-definition television and download films in seconds.

The absence of a clear strategy for a national fibre-optic network came as expectations for Digital Britain plunged in the hours before its publication.

Hopes that it would guarantee the future of ITV regional news, or Channel 4, or develop faster mobile internet services are expected to be dashed. Instead of offering firm conclusions it will highlight options for consultation, including the possibility of using licence fee cash for ITV regional news.

BT is proposing to connect 10 million homes to fibre-optic and Virgin Media to connect 12.5 million — but they are essentially aiming at the same homes in prosperous urban areas. That means 12.5 million homes could have no fibre-optic access and have to rely on copper phone lines for their broadband connections.

BT said: “We believe that the future is fibre, but it is only economically sensible for us to connect up the big cities and new-build houses; we’re not expecting Digital Britain to help us to run fibre into rural areas.” A Virgin Media source said that Digital Britain was “expected to offer us not much more than some tax breaks”.

Ensuring that the other half of the country can get fibre-optic would cost billions of pounds, and few believe that would be financially viable for BT or Virgin without taxpayer subsidy.

Whitehall sources indicated that, instead, there would be efforts to encourage internet companies to co-operate in “digital test beds” to expand and speed up internet access in small or mid-size towns. “Normally these guys would be competing,” an industry source said. “This is about finding ways to get them co-operating.”

Lord Carter had examined whether it would be possible to find public money to speed up the development of fibre optic, and had also hoped to persuade Vodafone and O2 to release some of their mobile phone radio spectrum for new national wireless broadband services that would allow high-speed connections everywhere. Neither Vodafone nor O2 has agreed.

An attempt to bail out Channel 4 by a merger with BBC Worldwide, the commercial arm of the BBC, has yet to be completed.

The uncertainty will raise hopes at the BBC that it can see off a move to share some of the £3.6 billion licence fee. Ministers want some of that to be used to help local newspaper publishers and other media groups to produce ITV news bulletins — but Sir Michael Lyons, the BBC Chairman, has said that the idea compromises the corporation’s independence.