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BT and Virgin Media have launched a legal challenge against Birmingham City Council's plans to build a superfast broadband network.

The council had successfully applied for European Commission State Aid funding for the scheme.

The council argues that it will help local areas which are underserved by existing providers.

However Virgin Media argues there is "significant overbuild" with its current network.

Birmingham City Council wants to build a 100+Mbps (megabits per second) broadband network to serve specific local areas including Digbeth, Eastside and the city's Jewellery Quarter.

It says that businesses in those areas do not have access to "affordable" high speed broadband.

It is one of the first European cities to acquire EC State Aid for a superfast broadband initiative and the council claims "up to 1,000 jobs" could be created by the project.

Councillor James McKay said the council was "extremely disappointed" by the actions of BT and Virgin Media.

"The city has worked in a very positive and collaborative way with them over the last few years to help inform and develop our business case and we are surprised that they have now chosen to appeal at such a late stage," he said in a statement.

"We are liaising with government and the European Commission and we are advocating that this matter be treated with some urgency as a 'test case' for Europe and that everything that can be done to expedite it through the legal process is done."

Virgin Media said the plan "involves a significant overbuild" with its existing network.

"We fully support the Urban Broadband Fund and government ambitions to bring superfast broadband to areas not currently served by existing fibre networks," said the broadband provider.

"So it's disappointing that Birmingham City Council has put forward a scheme which is not in the interests of local people and we believe, as a result, the European Commission has made a decision based on inaccurate and misleading information which could waste public money."

"Virgin and BT have had plenty of time to modernise, and they haven't," said Chris Conder, a campaigner for rural broadband.

"It's time to stand up for the Davids against these Goliaths."

Birmingham was on the original list of 10 UK destinations set to benefit initially from a £100m UK government fund to create "super-connected" cities.

Chancellor George Osborne announced the plans earlier this year, which should see three million UK residents benefit from high-speed broadband by the year 2015.