The Government will not back its controversial stimulus plan to stimulate the economy with the introduction of a new government-owned internet service provider (ISP).

The Government is instead pushing ahead with the idea of a government-run fibre optic broadband network.

The Coalition is considering using the National Broadband Network (NBN) to provide fibre optic connections to some parts of Australia, including the west, and the Federal Government has been adamant that it would not seek to use the NBN to provide the same level of service as it would under a private company.

“The Government does not believe that the NBN is the right option for Australia,” the Communications Minister Malcolm Turnbull said.

But NBN Co, which is run by the Turnbull Government, has said it is ready to support the NBN project and its fibre optic services.

Mr Turnbull said it was up to the Government to decide how it wanted to use it.

NBN Co said it supported the Government’s view that the rollout of the NBN would not be a full privatisation, and said it would seek to ensure that the project did not impact competition and consumers.

“[It] will not take the NBN and privatise it,” NBN Co chief executive, Tony Fernandes, said.

“It will be owned by the Commonwealth, and we will be in a position to provide a very competitive service, which we will continue to do.”

The NBN’s fibre optic service would be supplied by a network of six regional superfast copper lines that extend into some parts and into other parts of the country.

If the Coalition was to build its own NBN network, Mr Turnbull said he believed it would be more cost effective to build it through private companies rather than through the Government.

However, NBN Co said there were risks involved with privatising the NBN.

A private company’s broadband service would not have the same reliability and reliability as a Government-owned fibre optic network, it said.

The Coalition has argued that it should be able to secure government-controlled NBN services as long as it secured a deal with Telstra and Optus to operate the fibre optic lines.

Optus chief executive Mike Quigley told The Australian Financial Review that the Coalition would have to sell a substantial amount of its network before they would be able, but said they could secure private contracts.

He said Telstra’s NBN contract is set to expire in 2019, but that NBN Co would still be able access the existing network.

“We would expect them to be able do that for a number of years and be able operate their network,” he said.

“If they wanted to go out and sell their network, they would have a right to do that, and they would do that.”

Mr Quigleys comments have come as a blow to Labor, which had long argued the NBN should be built through a private sector company.