EU Competition Commissioner, Mr Mario Monti, has given the green light for millions of euros of government money to be invested in mobile telephony and high-speed internet access for poorer regions.

The initiative could allow EU countries to give a much-needed boost to hard-pressed telecommunications companies.

The move, revealed in a letter from Mr Monti to the French government, comes as the European Commission prepares to issue guidelines for the use of European Union subsidies for poor regions to help introduce broadband access.

About €10 billion of EU funds has been earmarked for purposes such as "improving digital literacy" and "upgrading the digital infrastructure" over the 2000-06 period, although the figure does not solely refer to the telecoms sector.

Mr Monti says in a letter sent last month to Mr Jean-Paul Delevoye, France's junior minister for town and country planning that, under certain conditions, French government plans to build high-speed internet infrastructures in disadvantaged regions would not breach state aid rules.

Mr Monti's move is likely to encourage other EU governments to inject state funds into the development of high-speed internet services.

In another letter to Mr Delevoye, Mr Michel Barnier, Regional Development Commissioner, indicates the EU would contribute "structural funds" for disadvantaged regions for these investments.

A spokesman for Mr Monti said the aid would not breach EU competition law provided access to the infrastructure was offered at competitive rates to all operators.

The Commission has warned against a "digital divide" separating those parts of Europe where Web penetration is at its highest - such as areas of Scandinavia - from remote and rural regions, where such opportunities do not exist.

However, an injection of public funds would also provide much-needed relief to telecommunications equipment manufacturers, which have been hit hard by the slump in investment in the industry.

The Commission was unable to specify how much financing it would give to France's effort to complete broadband access, but a spokesman for Mr Delevoye said the country's three main mobile operators would receive around €20m from the EU structural funds.