Ian Lang, President of the Board of Trade, claimed yesterday that Tony Blair had "quietly backed down" from his party conference deal with BT to invest in the information superhighway, writes Peter Rodgers.

He was speaking as Sir Peter Bonfield, BT's chief executive, helped launch a new four-year pounds 35m information technology project aimed at helping smaller firms get to grips with the information society.

Sir Peter chaired a discussion panel for business and computing specialists at a Department of Trade and Industry launch conference for the new project at Canary Wharf.

Mr Lang said the party conference deal last October was "in ashes as far as the Labour Party is concerned". Labour had realised its sweetheart deal with the company was monopolistic and anti-competitive, he claimed.

Mr Lang added: "We have been able to demonstrate that the sort of things pursued by the Opposition are already happening on the ground."

Ian Taylor, the Science and Technology Minister, said BT was a key player in the DTI's information society initiative because it had connections into more than 90 per cent of households in the country. He said that Sir Peter, who came from ICL, the computer manufacturer, "personified the interaction between computers and telecommuncations'.'

Mr Taylor made clear that the DTI was promoting well established technology rather than state-of-the-art methods, because the real need was to persuade the many firms that were not up to speed in the information society that they could benefit.