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The government's 50p-a-month broadband tax has been abandoned, it has been reported.

Opponents of the government's controversial plan appear to have triumphed, with the proposals being dropped as a political compromise.

The Labour government has had to concede defeat on the landline levy in order to rush through other key legislation before next week's dissolution of parliament.

Other measures to be dropped from the new finance bill include a ten per cent tax increase on cider, announced in last month's Budget, and an end to tax relief on holiday homes.

The Conservative Party has consistently pledged to scrap the broadband tax - which was intended to generate £175 million per annum for investment in rural web services - if it enters government at the spring general election.

Critics have claimed that the levy could encourage low-income households to give up their landlines and broadband connections altogether - essentially defeating the purpose of increasing high-speed broadband penetration.

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