BT has challenged Virgin Media to open up its broadband network after VM complained about the excessive government subsidies afforded to its rival.

The row was sparked in a letter to the Guardian by VM's Chief Operating Officer Andrew Barron, who brought into question the funds granted to BT via the government agency Broadband Delivery UK (BDUK). Barron argued millions of pounds of taxpayers' money is being used to subsidise BT's broadband deployment, effectively stifling the market in the process.

"If we agree competition is the best way to encourage further sustainable investment, and that embedding dominance in markets is bad for consumers, we must also accept that providing the vast majority of available public funding to an incumbent is not in the UK's best interests", he said.

But a BT spokesperson threw down the gauntlet in response, claiming the telecoms giant would be "more than happy" to compete with Virgin for government funding, and pointed out that, "Virgin have steadfastly refused to provide wholesale access to their network - a key BDUK requirement - and because they have shown no interest to date in supplying rural areas with broadband".