BT is offering UK-based customers a three-year guarantee to maintain the quality of services offered by the now defunct Concert venture. Created in 1998 by BT and AT&T, Concert is to close with the loss of 2300 jobs.

Customers will return to the telecom service provider they had before Concert's formation. AT&T and BT said agreements between the companies will ensure the continuity and quality of existing services for a period of three years.

In a joint statement they said that all existing contracts and service level agreements would be honoured.

Concert, which was initially predicted to have a £10bn turnover, was intended to be a single communications provider for multinational companies. Customers included the National Australia Bank and Texaco.

But the reality of achieving a single channel proved more difficult than expected and led to confusion, with Concert, BT and AT&T sometimes competing for the same business.

"Since Concert was conceived as an international venture, the global marketplace in our sector has changed out of all recognition and we need to change with it," said BT chief executive Sir Peter Bonfield.

BT chairman Sir Christopher Bland said: "I'm glad we have regained control of our own destiny in the provision of services to international customers."

There will be a deal between BT and AT&T to allow each company to provide services globally after Concert is unwound, which over two years will generate payments from AT&T to BT of at least $370m.

BT will take over all of Concert's managed services network infrastructure in Europe, Africa, the Middle East and the Americas, while AT&T will acquire the Asia-Pacific network. It will cost BT about £1.4bn to disentangle itself.

The deal is expected to close in the first half of 2002.