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TalkTalk and Tiscali-owner Carphone Warehouse is the latest broadband provider to distance itself from Phorm's controversial advertising system.

BT has already revealed that it will not be rolling out the marketing company's Webwise platform to its broadband customers.

Now Carphone Warehouse has followed suit in a further blow to Phorm, which had previously agreed deals with BT, TalkTalk and Virgin Media for its Webwise service.

Company head Charles Dunstone told the Times: "We were only going to do it if BT did it and if the whole industry was doing it. We were not interested enough to do it on our own.”

Fears have been expressed that Webwise could undermine broadband customers' privacy. It works by monitoring user traffic in order to supply targeted advertising.

Phorm has already moved to reassure its shareholders that the future of the company is safe and claimed that it is currently considering "overseas opportunities".

"In so doing we have already minimised our dependency on the deployment by any single ISP or in any particular market," the company claimed.

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