Plans for BT to use Phorm's Webwise advertising system have been scrapped.

The internet service provider had been planning to roll out the technology to its 4.8 million customers in the UK, creating concerns about privacy.

Webwise tracks the browsing habits of users for the purpose of targeting them with relevant information, but critics have labelled it as being too invasive.

BT revealed that it will instead be focusing its resources on other commitments in the UK, such as next-generation broadband and television.

However, a statement explained that although there are no immediate plans to deploy Webwise, similar technology could be considered in the future.

"We continue to believe the interest-based advertising category offers major benefits for consumers and publishers alike," said BT.

Phorm, meanwhile, noted that it continues to engage in talks with providers in 15 other countries, while Virgin Media and TalkTalk are still thought to be interested in bringing the system to the UK.

Last month, Google announced that testing of a new pay-per-click ad format had begun in the US.

Designed specifically for products, the advertising contains specific information such as prices and is displayed as a sponsored link when particular terms are searched for.