Jeremy Hunt has warned local councils that he may remove £530 million of funding from their control if they do not stick to deadlines for delivering superfast broadband.
The Culture Secretary said that he hoped his threat would "put the fire up everyone's backsides" while addressing the all party parliamentary group on local government, reports the Guardian.
"There is £530 million on the table to help deliver this, but I have to had to say that if broadband contracts aren't actually signed by the end of this year I will consider taking this back," he added.
"I do not want this to get bogged down in paper procurement."
Under current plans, councils have until the end of next month to submit their broadband plans to the government, complete with details of how they plan to bring superfast broadband to 90 per cent of the population within three years.
Mr Hunt added that he thinks the rollout of superfast broadband will help transform a number of areas of the UK, including schools and the NHS.
Currently, as many as 250,000 homes in the UK cannot access broadband with those in rural areas particularly struggling.
Earlier this month, Prime Minister David Cameron said that the government's superfast broadband plan is one of the ways in which the UK's infrastructure will be transformed, adding that it will help the nation return to growth.