The government has admitted that another half a billion pounds needs to be found if it is to achieve its universal broadband goal by 2015.
In a letter sent to MPs last week, Culture Secretary Jeremy Hunt confessed that the £530 million rural broadband fund will not be sufficient to ensure a nationwide rollout of 2Mb internet services.
He revealed that another £530 million needs to be sought through private investment, local council funding and Europe if the UK is to become 100 per cent connected by the middle of the decade.
The news comes as something of a personal blow to Mr Hunt – who recently claimed that the UK was on its way to having the best broadband infrastructure in Europe.
Clearly the prospects of this aim being achieved look slimmer than before, unless private internet service providers choose to up their investment.
BT is currently spending £2.5 billion upgrading its own network to support super-fast fibre services, while Virgin Media is continuing to roll out its 100Mb broadband technology.
However, both firms are continuing to focus largely on delivering internet services to urban areas, with the government's £530 million broadband fund needed to equip remote rural communities with high-speed internet connections.
Mr Hunt said the government would continue to allocate broadband funding "entirely on need" – although he recently announced that some money will be available to every local authority in the UK.
The Culture Secretary revealed that each council will know how much money they are going to receive by the time of the MPs' summer recess.
He expressed hope that peer pressure from neighbouring authorities may encourage other councils to find extra funding to complement the state-provided finance, and ensure high-speed broadband reaches the wider rural population.