Eircom and Esat BT held discussions with a Government-appointed consultant on how to accelerate the roll-out of the State's broadband network and allow nationwide high-speed internet access.
Both companies have said they met the consultant retained by the Government, Mr Ira Magaziner - who was head of the US government's e-commerce programme during the Clinton administration - during his research.
A report in the Sunday Business Post claimed Eircom subsequently rebuffed a €1.8 billion, five-year deal from the Government to extend its broadband coverage. Details of this proposal were contained in Cabinet documents, according to the newspaper.
Yesterday Eircom denied that any formal proposal had been put to the company. A spokeswoman for Esat BT told The Irish Times that Mr Magaziner had met that company in the course of his research but that it had not received a similar type offer of Government funds.
A spokeswoman for the Department of Communications, Marine and Natural Resources refused to comment on the contents of the documents, citing Cabinet confidentiality.
The documents were claimed to indicate that the Government was prepared to offer price increases on phone charges, tax breaks and to provide a guarantee on Eircom's debts that would assist its fund-raising requirements as part of the arrangement.
An Eircom spokesman described Mr Magaziner's project as "aspirational" and said it never materialised in a formal proposal to the former State-owned telecoms provider.
Mr Magaziner's company, SJS Inc, was retained by the Government to consider how it could swiftly improve broadband availability, which would allow high-speed internet access - crucial for the Republic's burgeoning information technology sector.
SJS reported to the Cabinet in May 2003 after lengthy consultation within the industry and with the Department of Communications, Marine and Natural Resources, headed by the then minister, Mr Dermot Ahern.
SJS claimed that Ireland could be among the world leaders in broadband deployment within three years with the help of certain incentives and financial assistance.
It was in this context that the €1.8 billion figure was arrived at as a combined investment between Eircom and the Government over five years.
