The government has admitted plans to ensure every home has 2Mbps broadband by 2012 are unrealistic, and pushed back the target to complete the upgrade to the end of the current Parliament in 2015.

The proposals to offer 2Mbps broadband to every UK resident by 2012 were first announced in the previous government’s Digital Britain report, which formed the basis of the Digital Economy Act that was pushed through before the General Election in May.

It’s thought that around 2.5 million homes can't get 2Mbps or above internet access, particularly those in rural areas of the country.

But culture secretary Jeremy Hunt now says the deadline will be pushed back, blaming a lack of funds.

The government originally planned to use the £200m surplus left over from the digital switchover fund to enable universal 2Mbps broadband. "Unfortunately... we found it wasn't enough," Hunt said at the Broadband Delivery UK conference yesterday.

Rural campaigners reacted angrily to the news. The Country Land & Business Association (CLA) said it was "disappointed and shocked", and warned that rural businesses would struggle to compete with firms in urban areas until faster broadband speeds are available across the country.

CLA President William Worsley said: "The government needs to recognise that broadband can act as a fundamental driver in propelling the UK out of its current financial situation. This will be put in jeopardy if we have to wait an additional three years before everyone can gain adequate broadband coverage.

"In his speech, Mr Hunt mentioned the increased use of government services online which he believed could lead to savings of at least £1 billion. Yet the one fifth of people living in rural areas who have no broadband access are unable to benefit from this."

But the announcement came as no surprise to many industry experts, who said before yesterday’s event that the government would struggle to raise the funds to enable ubiquitous 2Mbps broadband in the next two years, and the long-term rollout of 100Mbps speeds.

BT said earlier this week that the total cost of upgrading UK homes to superfast broadband would run into the billions.

"Unless the government has a few spare billion, it's not going to resolve this issue on Thursday," BT group strategy director, Olivia, Garfield told the Guardian earlier this week.

But Hunt insisted that broadband Britain is on the right track, despite the setback. He said that while the 2012 target isn’t achievable, the government still hopes to deliver "the best broadband network in Europe by the end of this parliament".