Most North East properties should have broadband by March 2005

Regional development agency One NorthEast and BT made the prediction as a further 29,000 homes and firms in the region were given broadband access.

The agency is spending �10m to make the region a flagship for "Broadband Britain."

Broadband offers connection to the Internet at much higher speeds than conventional telephone lines.

Almost 30 telephone exchanges in the region are now able to offer broadband to homes and businesses.

Margaret Fay, One NorthEast chairman, said: "The connection of communities across the North East, from North Northumberland to Tees Valley, forms part of our drive to ensure the North East leads the country in terms of urban and rural broadband infrastructure.

"This will help break down the barriers faced by people currently outside the reach of this turbo-charged technology.

Recognised benefits

"High speed broadband access is an increasingly important factor for firms relocating, particularly in rural areas.

"We have seen a recent example of this in Wear Valley, where two firms - one from Germany - have decided to locate in the recently opened Innovation House in Bishop Auckland, specifically because of its broadband links."

Ray Smith, BT's regional director for the North East, said: "High-speed internet communications is opening up a whole range of opportunities.

"Many businesses have already recognised the benefits the internet offers, but are still using traditional narrowband dial up services.

"Those using broadband report increased sales, greater cost savings, better productivity, improved employee satisfaction - and a healthier bottom line overall as a result."

During the last 18 months, BT, which still has 70% of the fixed-line phone market, has been trying to put broadband at the forefront of its strategy to modernise its business.