Talk Talk was one of three UK ISPs that had been in talks with Phorm over the use of the software, along with Vigin Media and BT – who backed away from introducing the technology yesterday, causing Phorm’s share price to plummet by 40%.

Charles Dunstone, head of Carphone Warehouse, told The Times in an interview today: “We were only going to do it if BT did it and if the whole industry was doing it. We were not interested enough to do it on our own.”

Phorm reacted to BT’s decision yesterday by saying it was focusing on “faster-moving overseas opportunities” and said it was in “advanced negotiations with several major ISPs” around the world.

The firm’s share price fell a further 14% today and a spokesman told Research the company was preparing to make a statement on Carphone Warehouse’s decision.

Virgin Media, the only UK ISP left in talks with Phorm, said yesterday that it was continuing to evaluate the Webwise product.