Schools in the North West are buying broadband from a public sector consortium at a fraction of the commercial price.

The service, which is available to local businesses, will serve as a case study in the government's delayed report on its strategy for broadband Britain.

The region's largest secondary school pays Cumbria and Lancashire Education Online (Cleo) £5,938 per year for a 10mb/s connection, rather than the £12,000 a year it says it was quoted by BT for a 2mb/s service.

The Cleo Regional Broadband Consortium used £3.5m of government grants to build its own wireless and synchronous digital subscriber line (SDSL) infrastructure because schools can't afford commercial prices.

Cleo has a contract to supply the region's libraries, is tendering for Cumbria County Council's wide area network and has its first private business customer in Penrith. But despite plans for Cleo to become a company, the consortium is focused on public service, says board member Steve Moss.

'Becoming a company would let us broaden our scope away from just schools,' he said. 'But we're not aiming to become another private telco - we are there to serve the public sector.

'Our dream is to provide internet connections to schools for free by generating enough income from small businesses to maintain the network,' he said.

Whitehall procurement arm the Office of Government Commerce was due to report last month on combining public sector broadband demand as an incentive for infrastructure investments in rural areas.

Computing has learned that the delayed report claims education is the most extensive public sector broadband user and recommends existing education networks be used as the basis for any wider scheme.

Barry Forde, Cleo technical architect and head of technical support for Lancaster University, said: 'We are already providing broadband to 50 per cent of the public sector so we might as well provide the other 50 per cent.'