Telecom Eireann is proposing to offer 100 hours of Internet access for £20, according to Telecom's Helen Stanton, who revealed the figure during a talk to the European Institute on Monday.

The so-called "flat-rate" Internet service package is under consideration by Telecommunications Regulator, Ms Etain Doyle. Telecom has promised to implement the rate immediately if it gains approval.

Telecom charges 12p per five-minute increment for Net access, or £1.44 per hour, at peak times, and 12p per 15 minutes, or 48p per hour, on evenings and weekends. The flat rate offering would reduce charges to 20p per hour, the lowest rates in Europe.

The new flat rate service, which originally was to be introduced in January, is designed to benefit moderate to heavy Internet users and encourage all Net users to stay online longer. It would prove more cost effective than Telecom's current offering if users are online more than an hour a day at peak hours or two hours in the evening or weekends. Internet users must still pay ISPs for an account - usually about £12 a month - in addition to phone charges.

Both the Government and industry have pressed for a flat-rate service to lower the costs of going online and encourage the growth of electronic commerce. The fact that local telephone calls are free, enabling Internet users to remain online without incurring extra costs, is considered to have been one of the key drivers of Internet usage in the US, where more than a third of the population is online. In Europe, the figure is about 10 per cent. Telecom believes that under existing EU legislation, the company would be prevented from offering unlimited calls at a flat rate.