Blair pledges £1bn to get UK online

Launching the UK Online initiative at the BG gas research and technology centre in Loughborough, Blair said the project would help the UK economy make the transition to new technology.

His plan includes 6,000 UK online centres that will offer low-cost internet access to the disadvantaged and a series of online vocational courses called 'learndirect'.

Blair added: "From now on every adult is able to claim an 80 per cent discount on computer literacy courses. That is a massive boost to IT skills in this country."

UK Online is designed to meet Blair's goal of making the UK the most favourable country in the world for ecommerce. The Prime Minister said that although the UK has been lagging behind internet leaders, his government has already begun to change that.

"Last September, we said we'd get unmetered access to the internet," he said. "We've done better than that. On the OECD comparisons, where last year we were average, today nowhere else in the world has cheaper access off-peak. Not America, not Sweden, not Germany, not anywhere."

Much of the UK Online initiative is a rebranding of existing programmes, and the vast majority of the funding will go to wiring up the government itself. The business community also walked away with an extra £15m dedicated to getting small and medium-sized businesses online over the next three years.

Alexander Drobik, vice president for business management at Gartner Group, said the size of the investment demonstrates that Blair is doing more than just paying lip-service to ecommerce.

He said: "In the last year, we've seen a lot of government targets, but very few have gone anywhere. This change won't be easy or quick and it will cost a lot more. But, at the end of the day, we have someone putting money behind these initiatives, and that makes it real."

Industry was also looking for tangible solutions to the skills gap from the PM.

In a prepared statement, Rene Shuster, managing director for Compaq UK and Ireland, said: "This country desperately needs small business to get online and get competitive, but they have been slow in doing this. I really hope that this announcement signals a really aggressive push from Tony Blair to broaden and deepen the use of the internet by our small businessmen."