Thousands of British homes will have to be reconnected to the television network – at a cost of up to £10,000 a time – after it emerged that interference from the new 4th-generation mobile phone network would wipe out their TV signals.

More than two million households near new base stations will suffer problems ranging from distortion to complete blackouts when the networks begin to share the spectrum currently used by digital terrestrial television (DTT) in the middle of next year.

Ministers will be forced to spend £180m on re-establishing television services to those homes closest to the base stations. The communications minister Ed Vaizey has confirmed that the 500 worst-affected households will receive up to £10,000 each from a special fund put together to deal with widespread 4G interference expected in the coming years.

Critics including MPs, broadcasters and unions have warned that families who rely on Freeview will find themselves victims of the lucrative auction of 4G licences within months.

John Whittingdale, chairman of the MPs' culture committee, said permitting 4G providers to operate on the 800 MHz band could interfere with digital TV reception in 2.3 million homes – almost half of which depend on the Freeview service.

The Government has said it would provide householders with filters to block the 4G signal, or provide up to £50 towards a professional refit.

But Mr Whittingdale said: "One of my concerns is that the Government is making the filters available only for households primarily using digital terrestrial TV, and yet there will be a large number of additional households that have second sets, and they will not receive filters. I have been informed that 38,500 households will still be affected after filter installation and that, of those, perhaps 18,000 will be primary DTT households."

The development of 4G, which enables superfast mobile broadband, has been highlighted as vital for consumers and the economy as a whole. The company Everything Everywhere has begun to roll out a 4G service using the 1,800 MHz spectrum, but experts have highlighted the dangers of other networks operating at 800 MHz, close to the 700MHz used by Freeview.

Ed Richards, head of the communications watchdog Ofcom, told MPs that reception in "significant numbers" of homes would be affected by 4G.

A briefing from UK terrestrial broadcasters urges the Government to establish "guard bands" to shield the 700 MHz spectrum. The document added: "It would be inappropriate if Ofcom were now to implement the 800 MHz award in such a way that would permit significant and harmful interference, and which would therefore undermine the consumer benefits delivered by the DTT platform."

Mr Vaizey said he had decided on a generous "mitigation" package to help affected households. The Government will send filters to all homes in an affected area whether or not they depend on DTT and, in the worst cases, pay up to £10,000 to establish "alternative ways of restoring good reception".