TalkTalk was launched in 2003 and has 2.8 million customers, making it the UK's third largest broadband provider. The potential sale is likely to attract interest from major players such as Vodafone, according to analysts.

News of the potential split came as the group announced interim net profits of £39m for the 26 weeks to September 27, compared with £44m in the same period last year.

Carphone's founder Charles Dunstone said the group had reached a "watershed" with two distinct businesses and announced plans to review the corporate structure.

He said: "We recognise that the structure of the group may now no longer be appropriate for the optimal development of the two businesses.

"The board has therefore initiated a formal review of the group's corporate structure and capital requirements, which may lead to a separation of the two businesses."

The move comes just six months after Carphone sold a 50 per cent stake in its retail business to US electronics firm Best Buy for £1.1bn as it looks to enter the European market for the first time.

He said he would remain closely linked to both TalkTalk and Carphone's stores business, now called Best Buy Europe.

Mr Dunstone, who still owns almost a third of the £1.3bn company, said an update on the review's progress will be announced in the spring.

Conditions in the broadband market have toughened in recent months as the property slump hits demand for connections.

Carphone said last month that net additions of broadband users – those leaving less those joining – plunged by more than half year-on-year in the three months to September 27, to 41,000.