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BT as defended receiving £1.7 billion of taxpayers' money to roll out broadband in rural locations.
The provider was given the subsidy to help fund its rollout of 24Mbps broadband across remote parts of Britain.
Nearly one in three homes have signed up for fast broadband, far more than the amount that had originally been calculated and used to determine the size of the subsidy.
BT therefore chose to return £258 million to the government.
Vodafone recently criticised the funding model on the grounds that BT has been left to decide what is and isn't commercially viable, the Telegraph reports.
However, BT has since insisted that the fact it is repaying money back to the government shows that the project has worked well.
Julian Ashworth, Director of Policy at BT, commented: "It shows that where we have success, we’re giving the money back."

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BT s to back the upcoming World Wi-Fi Day by offering providing free public Wi-Fi access for several days.
The event, which has been organised by the Wireless Broadband Alliance, is taking place for the first time on June 20th.
BT will honour the occasion by joining forces with FON and offering free public Wi-Fi access between June 22nd and July 22nd, ISPreview reports.
Alex Puregger, Chief Executive of FON, commented: "World Wi-Fi Day is an important initiative because we are all about connecting communities and giving access to people via Wi-Fi. 
"We really believe in and support closing the digital divide. To celebrate, we are working together with our partners to open up access on as many networks as we can around the world."
FON technology has been incorporated into BT HomeHub routers for some time, which means Wi-Fi connectivity is available to other BT broadband subscribers who are nearby.
The organisation has a similar arrangement with telecoms providers in countries including Australia, Greece, Belgium and the Netherlands.

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Openreach as insisted its infrastructure can cope with potential increases in minimum speed guarantees from the government.
In last month's Queen's Speech, the government confirmed it is bringing forward measures to give every UK household a legal right to a fast broadband connection.
The Digital Economy Bill states that a minimum broadband speed of 10Mbps will be guaranteed through a Broadband Universal Service Obligation (USO).
However, this minimum threshold could increase over time as demand for online services continues to rise, fuelled by trends such as more people working remotely and using streaming services.
Clive Selley, Chief Executive of Openreach, has therefore insisted it is taking a long-term view to ensure its infrastructure can accommodate any changes, SEENIT reports.
"As we design our solution for the 2020 timeframe we’ve got to be very mindful of the upgradability of it," he commented.
Indeed, he noted that during a recent trial of long-reach VDSL technology, most lines were pushed "way higher" than 10Mbps.
"I'm looking for solutions that don’t push those final few per cent [of lines] just over the 10Mbps boundary - that would be short-termist," Mr Selley said. "I'm looking for solutions that would push, either in the first instance, well above 10Mbps, or through technology innovation over time could be expected to go well above 10Mbps."
Mr Selley went on to stress that Openreach is committed to offering a better service to customers in the future and drastically cutting the number of missed appointments.
He insisted that raising service levels for customers is "absolutely key" for the organisation.

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TalkTalk has joined forces with Get Safe Online in an effort to cut the number of people falling victim to scammers.
According to the two organisations, the number of telephone and internet scams are currently at a record high.
TalkTalk and Get Safe Online have therefore set up a new nationwide awareness and education drive called Beat the Scammers to help consumers better protect themselves.
This includes an online hub ( containing guidance and advice, as well as a video outlining common tactics used by scammers and an interactive quiz allowing people to test their ability to spot a deception.
TalkTalk has also reminded consumers about its list of things it would never do in customer communications.
For instance, it said it would never use a person's TalkTalk account number to prove a call is genuine or ask customers to provide their full password - instead they would only be asked for two digits in order to protect their security.
TalkTalk's guidelines also state that nobody will be asked for their bank details to process a refund, as this information is already registered on its systems.
Furthermore, it said it would never ask anybody to send it money through services such as Western Union or Moneygram, as scammers only do this to stop transactions from being traced back to them.
Tristia Harrison, Managing Director at TalkTalk's consumer division, commented: "We know we have a responsibility to help protect our customers and we’re determined to play our part in combating this growing problem. Traditionally the onus has been put on individuals to stay vigilant. 
"But these increasingly sophisticated crimes are now affecting the whole country on an unprecedented scale - no one business, agency or individual can beat it on their own. We need nationwide action to take the fight to the scammers and make sure the online world is a safe place to play, work and stay connected."
Tony Neate, Chief Executive of Get Safe Online, added that many people fall victim to scams because they believe it will never happen to them.
This, he warned, is giving criminals the upper hand. Mr Neate said Get Safe Online is therefore very pleased to be working with TalkTalk to raise awareness of this "growing menace".
He urged anyone who is contacted out of the blue, seemingly by a company they trust, and asked to act urgently to be suspicious.
Mr Neate said criminals create panic in order to override people's common sense, which means consumers must trust their instincts and "think twice before handing over any information".

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Plusnet is to be investigated by Ofcom for potentially breaching rules on customer billing.
The internet service provider informed the watchdog that some customers may have been charged for a broadband or telephone service that was not live for a period of time between 2008 and 2015.
Ofcom will therefore investigate whether there are grounds to believe PlusNet did not comply with its obligations under General Condition 11 (specifically 11.1) of the General Conditions of Entitlement.
This states that the communications provider "shall not render any bill to an end user in respect of the provision of any Public Electronic Communications Services unless every amount stated in that Bill represents and does not exceed the true extent of any such service actually provided to the end user in question".

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Recent trials by BT using fibre optic cables have yielded record breaking results.
The company's specialists at Adastral Park in Ipswich have collaborated with Huawei on tests involving a live core network link extending more than 700km between London and Dublin.
They achieved a speed of 2Tbps, which is a brand new world record for a live network.
Researchers also managed to transmit speeds of 5.6Tbps over a single optical fibre running on its trial network between Adastral Park and the BT Tower in London.
This breaks the 3Tbps record set two years ago and is comparable to downloading nearly 200 HD quality films in a second.
Howard Watson, Chief Executive of BT Technology, Service & Operations, commented: "BT scientists built the first commercial single mode optical fibre link back in 1984 and the BT Labs remain at the forefront of photonics research more than 30 years later. The core network is the superhighway of the internet. It’s important that our core networks keep pace with the growth in bandwidth demands driven by take-up of high-speed fibre broadband, HD content, 4G smartphones and tablets and in the future, 5G services."
Mr Watson added that BT is investing in its core and high-speed access technology such as fibre broadband to ensure there is no capacity crunch and that broadband customers get the best possible speeds.
He described the recent tests as "landmark trials" that demonstrate BT is able to deliver the speeds needed in its core networks to stay several steps ahead of rising customer demand.

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Vodafone's recent efforts to attract more fixed broadband users in the UK have paid off, new figures show.
According to the company's latest trading statement, it added 20,000 fixed broadband users between January and March 2016.
This took the total number of UK-based subscribers up to 109,000, and helped Vodafone establish itself as the fastest growing broadband provider in Europe.
Other highlights in the trading statement included a 2.3 per cent increase in group organic total revenue, which stood at £41 billion by the end of Q1.
As a result, Vodafone is confident about its prospects for the coming months.
Vittorio Colao, Group Chief Executive, commented: ‘’This has been a year of strong execution for the group.
"I am confident we will sustain our positive momentum in the coming year, allowing us to maintain attractive returns for our shareholders.’’