The Irish company Digiweb has reached a new agreement with its satellite provider, Satlynx, following a dispute between the companies earlier this week that left hundreds of firms without a broadband service.

Satlynx said it had re-established a network connection for Digiweb after the parties agreed the terms of a new agreement.

Digiweb has been without any service from Satlynx for more than four days following what Satlynx described as a "contract termination". In a statement, Luxembourg-based Satlynx said it was forced to take this action as "a last resort".

Its chief executive, Paul Heinerscheid, said: "I am pleased that we have now agreed to new and acceptable terms and we hope that this new agreement will be the basis of a more productive relationship."

Digiweb, which holds the largest number of State contracts to supply broadband to Irish schools, has been trying for several days to get its service restored.

About 450 firms using Digiweb's satellite service were unable to use the internet after Satlynx stopped supplying Digiweb on Monday morning.

The outage also affected up to three of the State-financed group broadband schemes, which were set up to help people in rural areas access broadband. Digiweb had to inform the Government about the problem and assured them it would not affect the schools' project.

The rollout of the €20 million schools project, which was championed by the former Minister for Communications, Dermot Ahern, begins next month with Digiweb holding contracts to supply 1,428 schools with a broadband service.

Satellite broadband is much more expensive than other types of broadband such as DSL or fixed wireless. But it offers customers in remote locations and in rural areas their only access to the high-speed internet services.