After complaints about American dominance of the internet and growing disquiet in some parts of the world, Washington has said it will relinquish some control over the way the network is run and allow foreign governments more of a say in the future of the system.

Icann – the official body that ultimately controls the development of the internet thanks to its oversight of web addresses such as .com, .net and .org – said today that it was ending its agreement with the US government.

The deal, part of a contract negotiated with the US department of commerce, effectively pushes California-based Icann towards a new status as an international body with greater representation from companies and governments around the globe.

Icann had previously been operating under the auspices of the American government, which had control of the net thanks to its initial role in developing the underlying technologies used for connecting computers together.

But the fresh focus will give other countries a more prominent role in determining what takes place online, and even the way in which it happens – opening the door for a virtual United Nations, where many officials gather to discuss potential changes to the internet.

Icann chief Rod Beckstrom, a former Silicon Valley entrepreneur and Washington insider who took over running the organisation in July, said there had been legitimate concerns that some countries were developing alternative internets as a way of routing around American control.

"It's rumoured that there are multiple experiments going on with countries forking the internet, various countries have discussed this," he said. "This is a very significant shift because it takes the wind out of our opponents."

He added that the changes would prove powerful when combined with upcoming plans to allow web users to use addresses with names in Chinese, Arabic or other alphabets other than Latin. Many countries have lobbied for the shift in recent years, as the expansion of the web reaches out deeper into society and business.

While the issue reached critical mass in emerging economies such as China, it is not the only country that has lobbied for a change. Earlier this year European officials said that they did not think it was proper for America to retain so much control over the global computer network.

Viviane Reding, the EU's commissioner for information society and media, said she was pleased that Washington chose to make the shift.

"I welcome the US administration's decision to adapt Icann's key role in internet governance to the reality of the 21st century," she said. "If effectively and transparently implemented, this reform can find broad acceptance among civil society, businesses and governments alike."

Meanwhile Nominet - the British organisation that handles the day-to-day running of .uk domain names - said that Icann had started a trend for companies with internet influence to appear more open and accountable.

"Putting public interest first will also be a focus for the UK internet community over the coming months as there is growing support for Nominet to develop more of a public interest role," said Nominet's chief executive, Lesley Cowley.

The new agreement comes into force immediately. It replaces the old version which had been in place since 1998 and was scheduled to expire today.

Beckstrom suggested that bringing more countries to the table was the best way of ensuring the long term future of the internet.

"We're more global, period. The chances of the internet holding together just went up, the cohesion just went up," he said. "We expect more active involvement from governments, a higher level of participation from many governments and we're already hearing about more governments joining the team… This was, ironically, a power move from the US."