BT has dropped Phorm's controversial technology that tracks customers on the internet.
Phorm's service tracks the sites consumers visit and then targets adverts at them. BT has been criticised for trialling the technology without informing its customers, and there has been fierce debate over whether the service is legal.
BT says it wants to devote its resources to other services, but said it would be watching to see how the use of Phorm's technology develops with other internet service providers (ISPs). Phorm says it is focusing on overseas markets such as South Korea, but it will continue to develop the service into a form that UK ISPs find useful.
A BT spokesperson said, "We continue to believe the interest based advertising category offers major benefits for consumers and publishers alike. However, given our public commitment to developing next generation broadband and television services in the UK we have decided to weigh up the balance of resources devoted to other opportunities.
"Given these resource commitments, we don't have immediate plans to deploy Webwise today. However the interest based advertising market is extremely dynamic and we intend to monitor Phorm's progress with other ISPs and with Webwise Discover before finalising our plans."
Phorm will be focusing its efforts more on overseas markets, a spokesperson said, although UK activities will "remain ongoing".
"As regards our UK deployment, Phorm's activities remain ongoing and we look forward to creating the conditions necessary for UK ISPs to move to deployment.
"In parallel, we continue to focus considerable effort on faster moving overseas opportunities. In so doing we have already minimised our dependency on the deployment by any single ISP or in any particular market. In addition to making excellent progress in South Korea, we are engaged in more than 15 markets worldwide including advanced negotiations with several major ISPs.
"These discussions have been greatly accelerated by the launch of Webwise Discover and its clear benefit to consumers, which has been viewed as a key step forward by all of our partners, including those in the UK. We remain very confident in our ability to deliver on the promise of this substantial opportunity."