BT may have to split into two companies after being warned it is making a monopoly out of superfast broadband.

The warning comes from shadow business minister, Chi Onwurah, who said UK ministers are risking "sleepwalking into another monopoly." Onwurah gave evidence to a committee inquiry into broadband at the House of Lords, according to The Guardian.

"I think structural separation is something we are going to have to look at," said Onwurah. "It's a significant intervention and BT would rightly complain but monopoly provision of superfast broadband just isn't an acceptable option."

BT has rejected the claim that it has a monopoly on broadband pointing to the fact that Virgin Media's network covers half the UK.

A problem area is the £980m that the government has promised to invest in upgrading copper wires to fibre. This sum includes £530m which only BT and Fujitsu are bidding for at the moment.

BT rival Virgin Media said that, in urban areas, competition has led to faster speeds and better prices for consumers. However, it is concerned that the money from the government is likely to go to BT and reinforce its monopoly in rural areas, where it already dominates.

"The government is doing so much to get competition into the NHS where nobody really wants it, and doing so little to get competition into telecoms where everybody agrees it is the best way," added Onwurah.

She also called for regulator Ofcom to do more to promote competition saying: "Ofcom need to make clear that they are committed to competition in superfast broadband."