SHARES in BT tumbled and rival TalkTalk paused the sale of one of its businesses after Labour announced plans to nationalise broadband.

Unveiling the £20 billion policy in a speech in Lancaster, Jeremy Corbyn said free fibre broadband to all homes and businesses by 2030 would make the UK "fairer, more equal and more democratic".

Arguing that it would also "fire up the economy, give a massive boost to productivity and bring half a million people back into work", he said: "What was once a luxury is now an essential service."

The party leader went on: "It's core infrastructure for the 21st century and I think it's too important to be left to the corporations."

The comments came after details of the policy were reported in the media – and 4% was knocked off the value of BT shares.

The company's Openreach network is available to 31.8 million premises and £13bn has been invested in this network over the past 10 years, with Openreach annual revenue now at around £5bn.

The BT share price later stabilised to just a 2% fall which still wiped almost £500m off the company's value.

Speaking on the Today programme, BT chief executive Philip Jansen said Labour had seriously under-estimated the price of its pledge, saying it would cost closer to £100bn: "You've got a big capital investment, say £30-£40bn, if you're giving it away free, for example, that's probably another £5bn a year of revenue that Openreach currently gets in from its customers."

He went on: "These are very, very ambitious ideas, and the Conservative Party have their own ambitious idea for full-fibre for everybody by 2025.

"How we do it is not straightforward, it needs funding, it's very big numbers, so you know we're talking £30 to £40bn per building, and if you're giving it away it's again a sort of eight-year timeframe, it's sort of another £30 to £40bn. So you're not short of £100bn."

Meanwhile TalkTalk's chief executive Tristia Harrison told the PA news agency the sale of its full fibre broadband business, FibreNation, has been put on hold after the Labour announcement.

And James Lusher, Virgin Media's head of external communications, made his views on Labour's policy clear by tweeting a gif of a raccoon stealing food from a cat bowl captioned with the words: "This mine now."

Responding to the plan, the SNP's Humza Yousaf told the BBC that Labour are making "pie in the sky promises".

Referring to Nicola Sturgeon's pledge to deliver superfast broadband across Scotland, he went on: "I have seen some of their back-of-the-fag-packet calculations.

"I am not convinced they will be able to deliver on it, but what I would say is the Scottish Government is just getting on with the job of actually delivering it.

"All these things have to be realistically looked at and I think almost every service under the sun the Labour party are suggesting they would nationalise without actually giving detail."

However Labour's shadow chancellor John McDonnell insisted his party's pledges are fully costed and the broadband plan would deliver "public ownership of the future".

Labour has said the pledge will be paid for through the party's Green Transformation fund and taxing corporations like Amazon, Facebook and Google.

However, Julian David, chief executive of tech trade association techUK, said it would strangle investment, stating: "These proposals would be a disaster for the telecoms sector and the customers that it serves."