Councils needing to upgrade their broadband infrastructure may be asked to bid for public cash, the Financial Times has reported.
The news comes as part of plans to provide superfast internet access to people living and working in rural areas.
Over the next seven years, ministers are to take £830m from BBC licence fee revenues in a bid to roll-out fibre networks across rural areas.
It is hoped that the move to create local fibre hubs with public cash will prompt operators to supply superfast broadband connections to such areas.
Broadband policy is looked after by culture secretary Jeremy Hunt - who wants every community in the UK to have access to superfast broadband by 2015.
Mr Hunt wants local authorities, possibly in conjunction with telecoms companies, to bid for public subsidies to build the fibre hubs.
Mr Hunt said the plan aimed to stimulate private sector investment and cut barriers to business investment in the reliable and secure superfast network which ministers regard as vital to the UK’s economic growth.
Ministers will invest £50m in a second wave of pilot projects to test how digital hubs can be extended to all communities, including those in remote rural areas.
And there will be moves to cut the costs of access to communications infrastructure and new awards of 800MHz and 2.6GHz spectrum to allow the development of next-generation mobile services.
Already, more than 70% of UK households have broadband and nearly 50% have access to a superfast 50 Mbps service.
Mr Hunt, left, said: “A superfast network will be the foundation for a new economic dynamism, creating hundreds of thousands of jobs and adding billions to our GDP.
“But it is not just about the economy, around the world there are countless examples of superfast broadband helping to build a fairer and more prosperous society, and to transform the relationship between government and citizens.
“And shifting government services online will save billions of pounds of taxpayers’ money.”