British Telecommunications said yesterday it was cutting charges for weekend calls and introducing a free call allowance for the first time in a new pricing system for residential customers in Britain.

The telecoms giant, which is fighting off competition from aggressive mobile phone companies, will cut the cost of UK weekend calls by more than 30 per cent to two pence per minute.

From October 1st, residential customers will get free call time equivalent to three hours of local weekend calls a quarter, or £1.80 sterling in monetary terms.

Residential rental charges will go up by just over one pence a day to £27.77 a quarter.