Schools, libraries and council offices will be on the network

The contract is said to be the biggest of its kind ever struck in Scotland.

The geography of Dumfries and Galloway and the Borders has made it difficult for the two regions to take full advantage of the broadband revolution.

Under the scheme, internet provider Thus will connect more than 400 separate sites to the network.

The funding package was put together by the South of Scotland Broadband Pathfinder Project.

'Vitally important'

Alan Hasson, project director, said: "Ensuring that local public services have access to the latest broadband is vital."

Forty-nine international companies expressed an interest in the contract.

Thus was chosen to supply and install the network to 440 premises over the next two years.

Bill Allan, chief executive officer, said: "Pathfinder South is a vitally important project, delivering next-generation services to local communities."

The project was officially launched by Education Minister Peter Peacock.

He said: "This is a major step forward for Scottish education and public services and a major contract to a Scotland based company.