Chancellor of the Exchequer Alistair Darling backed Communication Minister Stephen Carter's plan to bring 2Mbps broadband access to everyone in Britain in this week's Budget.
Carter's plan to increase minimum broadband speeds in the UK to 2Mbps was detailed in his Digital Britain report earlier this year.
In the Budget, Darling said that "virtually everyone" in the 1.5 million households that don't currently achieve speeds of 2Mbps or above will be given broadband access.
He said funding would come from the 'Digital Switchover' fund, which saw TV licence fees set aside to help pay for the analogue to digital switch.
"If necessary, the cost would also be met through additional funding mechanisms," said Darling.
He added that 2Mbps broadband was "vital to ensure the entire country and economy benefits from the digital age".
Darling also announced a £100m trial of next generation fibre-optic broadband that could offer speeds of up to 100Mbps for 1.2 million residents in South Yorkshire.
The Chancellor said the Digital Region scheme will run in Barnsley, Rotherham, Sheffield and Doncaster, but not in rural parts of the areas.
In a further blow for broadband access in rural areas, Stephen Carter said this week there was "no economic case" for super-fast broadband in up to 30 percent of the country, due to current broadband coverage problems.
Jessica McArdle, marketing manager of broadband comparison site Top 10 Broadband, said: "The government is restricting the growth of small rural businesses by failing to improve broadband coverage in more remote areas; it's a scandal that so much of the country will be left out of the fibre-optic broadband roll-out".
"The broadband for all plan was intended to solve the nation's broadband coverage problems. Instead it will actually widen Britain's digital divide and make us a nation of next-generation broadband have and have-nots."