Line rental charges will also drop for customers who get their bills online

Evening and weekend call charges as well as the cost of its Option 2 and 3 packages will fall by up to 20%, saving customers up to �34m a year, BT said.

However, while BT is cutting some call charges and line rental costs, the cost of daytime calls will rise.

The firm's contentious �4.50 charge for customers who do not pay bills by direct debit will also remain in place.

Under the plans, the cost of BT's Option 2 bundled package - which offers customers "free" weekend and evening calls - will fall immediately to �3.45 a month from �3.95.

The cost of its Option 3 package - which offers unlimited free calls to UK landlines - will be cut from �9.95 to �7.95 a month while the cost of evening and weekend calls will drop from 5.5 pence to 4.5p.

BT's monthly line rental charge will also be cut by 25p to �10.50 a month immediately for customers who receive their bills online.

Package push

The changes are being seen as part of a push by BT to encourage new and current customers onto its all-inclusive payment plans.

It won't be long before rival telecoms firms respond by slashing their own prices Karen Darby, SimplySwitch.com

"We think more and more people want packages where the majority of their calls are included per month," added BT spokesman Ross Cook.

"We think the days of paying per call are starting to come to an end."

BT Consumer managing director Gavin Patterson added that the decision had been a response to customer demands.

"They've told us they want better value packages. They also said they prefer the comfort of a calls package so we're giving them what they want. Why pay per call when you don't pay per e-mail," he added.

Rising costs

However, while many charges are falling the company also announced it would be increasing a number of tariffs.

Some 11.4 million Option 1 customers - who pay line rental plus individual call charges - will be worse off if they make daytime calls as from 1 August BT will be raising the cost of its peak time calls to 3.25p from 3p a minute.

The daytime price rise will also affect Option 2 customers, and Option 3 users making calls to mobile phones.

Furthermore, BT's connection fee will double for all customers from 3p to 6p per call.

Experts added that BT's decision to cut many of its prices could spark a round of reductions from its competitors.

"It won't be long before rival telecoms firms respond by slashing their own prices, sparking a price war that will further benefit the customer," said Karen Darby, founder of price comparison website SimplySwitch.com.