PlayHouseholders face a "broadband tax" to pay for internet access to be extended nationwide.
The £6-a-year levy on fixed phone lines - generating up to £175 million a year - would subsidise the cost of installing next-generation broadband networks in areas where they would not otherwise be economically viable.
The proposal was included in the Government's wide-ranging Digital Britain report, which also suggested using part of the TV licence fee to pay for ITV local news and other programmes on non-BBC channels.
Every home and business in the UK will have access to at least 2 megabits per second (2Mbps) broadband by 2012, under the plans.
This will be paid for using £200 million in public money, in part from leftover funds in the licence fee-financed scheme to help elderly and disabled people switch to digital TV.
The report also proposed using cash from the licence fee to fund consortia of regional news providers to replace the current ITV service.
From 2013 about 3.5 per cent of the fee - around £130 million a year - could be allocated to public service programmes on non-BBC channels, in particular ITV regional news and shows for children.
BBC Trust chairman Sir Michael Lyons said in a statement: "On behalf of licence fee payers, the BBC Trust opposes top-slicing. The licence fee has a clear aim, clear benefits, is clearly understood and has stood the test of time.
"Top-slicing would damage BBC output, reduce accountability and compromise independence. The licence fee must not become a slush fund to be dipped into at will, leading to spiralling demands on licence fee payers to help fund the political or commercial concerns of the day."
ITV and Channel 4 broadly welcomed the report, but Five Chief Executive and Chair Dawn Airey said Digital Britain was a "disappointment" and suggested it was proposing a "political fudge".
Internet users who illegally download music and films will be encouraged to change their ways before they face legal action under new measures.
Ministers are planning legislation giving Ofcom new powers to clamp down on persistent illegal downloaders.
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