Eircom has submitted bids to build fibre-optic networks in Cork, Galway and Donegal for a Government project that the firm initially opposed strongly because it would compete with its business.

It is believed the firm has dropped its initial opposition in the hope of gleaning some revenue from the multimillion euro project for its construction arm.

Eircom has also submitted expressions of interest to develop similar fibre-optic projects in towns throughout the Republic, which are potentially worth €20 million.

It is understood Eircom is interested in bidding for contracts to build fibre-optic rings in Waterford, Wexford, Carlow, Ballina, Letterkenny and Limerick. It will also express an interest in bidding for similar contracts in other towns.

The tenders for telecommunications networks, which are being managed by local authorities outside Dublin, are all part of the State's plan to roll out broadband infrastructure into the regions.

The first stage of this plan, which was announced last year by the former Minister for Public Enterprise, Ms O'Rourke, will involve local authorities developing fibre-optic rings around 25 towns.

The three-phase plan - which was developed by an interdepartmental review group comprising members of several Government departments - will part-fund the roll-out of €300 million fibre-optic networks in 123 Irish towns with a population in excess of 1,500.

However, the second and third phases of the plan have not yet received Government backing.

It is anticipated the town fibre-optic links will facilitate consumers, educational establishments and businesses with "always-on", low-cost, high-speed internet services in the future.

These types of technology are vital to encourage private industry to invest in these regions and promote the concept of an information society outside the Dublin area.

Sources said last night Eircom would face competition from a number of telecoms infrastructure firms and construction firms for the lucrative building contracts. A decision by local authorities was expected shortly, said a source.

Competitors to Eircom may oppose a contract win by Eircom because the new fibre-optic ring infrastructure is meant to be managed on a "carrier-neutral" basis - which means firms will all be offered equal access to the fibre-optic network. One of the reasons the Government has proposed the construction of the new fibre-optic networks is that competing firms have complained that they often find it difficult to access Eircom's local access network - the wires that enter every home in the Republic.

One industry source said competitors would be suspicious of Eircom's intentions if it won the contract to build the network. They would be concerned that the firm might in some way try to limit access to the network, he said.

Eircom initially strongly opposed the Government's broadband initiative alleging that it would merely replicate its own network and would, therefore, act as a competitor to the firm. It is believed the firm remains sceptical of the merits of the proposed multimillion euro investment.

An Eircom spokesman refused to comment yesterday.