Cheaper internet access could be available by early 2003 following Government intervention to force telecoms operators to cut prices.

The initiatives, which were announced yesterday at a conference in Dublin by Mr Dermot Ahern, the Minister for Communications, are designed to overcome a two-year dispute between Eircom and other operators over the introduction of a flat-rate internet service.

Flat-rate internet access enables consumers to stay connected to the internet for as long as they want and pay a monthly subscription charge rather than a per-minute charge. Several recent surveys have found the high cost of internet access here is slowing the uptake of the technology.

Eircom - the dominant operator - has consistently said it will not offer a flat-rate internet service to consumers because it believes it would be uneconomic and clog up its network.

But operators in nine European states already offer a similar service, and rival firms here - which need to use Eircom's network to offer a flat-rate service - have persistently lobbied the regulator to introduce it.

Up to now the telecoms regulator, Ms Etain Doyle, has facilitated discussions between the operators but has not intervened in the dispute to enforce a settlement. It is understood she feels she does not have the necessary powers to force Eircom to offer competitors access to its network for a service.

But the Minister for Communications, Marine and Natural Resources, Mr Dermot Ahern yesterday said he was directing the proposed new Commission for Communications Regulation - which will take over the role of the Office of the Director of Telecommunications Regulation (ODTR) - to introduce a flat-rate internet service as an "absolute priority".

The establishment of the new commission will be announced by the Government within weeks.

The direction is the first to be made using legislation enacted earlier this year, and represents the Government's first major intervention in the telecommunications sector since deregulation.

Under the Communications Act 2002, Mr Ahern must publish a detailed policy document for industry consultation for 21 days. After that he can issue the direction, mandating the Commission to take action.

Mr Ahern said yesterday that flat-rate internet access was vital to drive the information society and was pivotal to the development of the economy and society. The Government believes its intervention will enable the Commission to mandate Eircom to offer a wholesale flat-rate price to its competitors. A Government spokesman said the new service should be available by early 2003.

However, some experts said last night it was not clear whether the new Commission would have the powers to force Eircom to offer a service. Mr David Long, chairman of the internet pressure group, IrelandOffline, said he welcomed the direction yesterday but the Minister had to ensure the regulator had the power to enforce it.

Meanwhile, Esat BT - Eircom's main rival - said yesterday it would dramatically cut the cost of its digital subscriber line service to offer consumers an always-on high-speed internet service for €49.50 per month.