EVERY community in the North-East will be hooked up to broadband by spring next year in a pioneering £10m scheme.

A total of 87 regional telephone exchanges will be upgraded with new technology, making the North-East the only region outside London where every telephone exchange has broadband capability.

The connection work - to be carried out by BT - will mean thousands more people and businesses across the North-East being able to access broadband for the first time.

After the project is completed in March 2005, 94.5pc of the North-East population will have access to high-speed internet services.

Regional development agency One NorthEast identified a need for greater broadband provision, particularly in rural areas such as Tynedale, Weardale and Teesdale.

The asymmetric digital subscriber line broadband equipment being installed will allow people to surf the web at ten to 40 times the speed of a normal modem, and use the telephone at the same time.

The regional development agency will contribute £4.7m to the project, using its own cash and EU finance, with BT funding the remainder of the scheme.

Alongside the work to upgrade telephone exchanges, miles of fibre optic cable will be laid to connect some of the exchanges back to the core internet network. Only the remotest rural properties will remain without a link to broadband.

One NorthEast will look to provide alternative broadband provision to these homes and businesses through measures such as deploying satellite systems.

Margaret Fay, One NorthEast chairman, said: "This scheme will mean the North-East leads the country in terms of urban and rural broadband infrastructure, helping to break down the barriers faced by people currently outside the reach of broadband.

"It will allow people to successfully work from home in rural areas, potentially starting new businesses and bringing opportunity into areas previously unable to take advantage of high-speed internet services."

BT group chief executive Ben Verwaayen said: "The vision that One NorthEast has shown with this groundbreaking project will see the North-East lead the way in getting towards 100pc availability of broadband."

Durham County Council's head of e-government, Alan Hodgson, said: "This project is very important for communities and businesses in County Durham.

"We have been involved in the development of this ground-breaking project right from the start and we will be prioritising the exchange upgrade programme in County Durham over the coming year."