One of Britain’s most profitable internet access marketing deals may soon come undone, according to reports at the weekend.

The Sunday Telegraph claimed that Dixons – the nation’s biggest electronics retailer – is set to terminate its five-year agreement with Freeserve, the ISP it part-owns, in favour of a deal with America Online.

Under the existing arrangement, computers sold in outlets of Dixons and its PC World and Curry’s chains come pre-loaded with Freeserve software. The agreement has helped the ISP become Britain’s biggest, and earned an estimated £600 million ($967m; €855m) for Dixons.

Now, however, Dixons is thought to be turning its back on Freeserve, even though the retailer holds a stake in Wanadoo, the internet firm’s parent.

According to Sunday’s report, Dixons will unveil a deal with AOL “within weeks”. Expected to commence in February next year, the new agreement will see the US online giant pay a commission for every Dixons customer it recruits. The two firms will also produce a joint ad campaign, while Dixons will promote AOL in store.

AOL is said to have offered Dixons £10m to clinch the deal, a sum Freeserve was unwilling to match.

None of the parties involved have commented to date.

Data sourced from: BBC Online Business News (UK); additional content by WARC staff