The Federal Government has aborted its tender process for its new national broadband network - allowing Telstra to become involved if it wishes.



The Government had been expected to reveal today its private sector partners for the network, in which it has promised to invest up to $4.7 billion.



But Prime Minister Kevin Rudd and other ministers announced at an early morning news conference that the tender process was being terminated after advice from an independent panel of experts that none of the national proposals offered value for money.



"The panel noted the rapid deterioration of the global economy had a significant impact on the process," Mr Rudd and the ministers said in a statement.



Instead, it will create a new company to build a more ambitious and expensive network, at an expected cost of $43 billion over 8 years.



The Government will be the majority shareholder in the company but will seek significant private sector investment.



The network will connect 90% of homes, schools and workplaces with speeds of up to 100 megabits per second via optical fibre to the home technology, and the rest of the country with speeds of 12 megabits per second via wireless and satellite technology.



Telstra was excluded from the tender after it failed to put in a bid complying with requirements.



But there has been widespread speculation that the venture cannot effectively operate without Telstra's involvement, and that a deal might be possible when a new boss replaces the outgoing Telstra chief Sol Trujillo.

The Government will make an initial investment of $4.7 billion in the company but intends to sell its interest within five years after the network is fully operational.



The new network will deliver high speed broadband to 90% of the country through optical fibre.



The service would be up to 100 times faster than that presently available, Mr Rudd said.

