In a speech, Gordon Brown called super-fast broadband "the electricity of the digital age" which "must be for all - not just for some".
The Conservatives say they have made a similar pledge and have attacked a £6-a-year landline levy planned by Labour.
The PM also promised to create a single website bringing together all government and public sector services.
The "mygov" portal will allow people to manage pensions and benefits, pay council tax, apply for school places and jobs, and book doctor's appointments - all online.
He said it would end the "one size fits all" style of public services and would help the British government become "the most efficient, open and responsive" in the world.
Web institute
In his speech, Mr Brown argued that faster broadband speeds would allow for cheaper and better public services as well as ushering in more sophisticated entertainment options and making trade easier.
But leaving this to the market alone would lead to coverage "determined not by need or by social justice, but by profitability" and "a lasting, pervasive and damaging new digital divide".
Instead, he said it was up to government to create a fair digital future, adding: "The alternative is our vision: ensuring, not simply hoping for, universal coverage."
Mr Brown said greater use of the internet would also allow people to have more say over government policy, such as through e-petitions, and could result in big cost savings by making public services more efficient.
The PM also said Labour planned £30m of funding for a new Institute of Web Science, to be based in Britain and jointly headed by Sir Tim Berners-Lee, inventor of the world wide web.
This, he said, would carry out pioneering research, in collaboration with universities and the private sector, to develop the next generation of the web.
Jim Knight, the minister responsible for digital inclusion, said the government had to intervene to ensure super-fast broadband reached remote areas of the country.
He told BBC Radio 5 live: "You offer incentives to the market to get to those areas that otherwise they're not going to be able to make a profit out of going to.
"By having universal access to this very high bandwidth which allows more streaming video, allows people to watch TV and listen to radio online, it means that we can also release the business and employment potential of this.
'Technology manifesto'
"If you just leave it up to the market it'll only go to into the cities, it won't get out into rural Cornwall for example without some form of public subsidy."
The government is planning a 50p-a-month levy on landlines to help ensure that rural areas do not miss out on a fast network.
The Conservatives have attacked the tax, saying they will force BT to open up its network to competition, and if necessary use cash from the BBC licence fee to fill in gaps in the fast broadband network.
In their "technology manifesto", the Tories have pledged to give Britain the fastest high-speed broadband network in Europe if they win the general election.
They have also pledged to put more government services online and to publish huge swathes of government data and contracts - and make Britain a world leader in the digital revolution.
Digital campaigners the Open Rights group said Mr Brown's plans were incompatible with provisions in the Digital Economy Bill, which is currently going through Parliament, to cut off persistent illegal file-sharers.
Executive director Jim Killock said: "Online government is a great idea, but Labour cannot say people will depend on online government, and simultaneously plan to disconnect families after allegations of minor copyright offences."
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