ScottishPower's telecommunications arm, ScottishTelecom, has agreed a £66m cash deal to buy Demon Internet, the largest independent Internet Service Provider (ISP) in the UK.

The acquisition propels ScottishTelecom into the leading position in the rapidly growing Internet market and greatly strengthens its existing telecomms network business.

ScottishPower Finance Director Ian Russell, who is Chairman of ScottishTelecom, said:

"Our existing expertise in telecomms, on-line information and call-centre services places us in a uniquely strong position to exploit the potential of Demon and to create further value for ScottishPower shareholders."

ScottishTelecom plans to route a significant proportion of Demon traffic across its network. Launched just over three years ago, ScottishTelecom has already gained 6% of the corporate market in Scotland and plans to capture 10% of the £2 billion telecomms market in Scotland by 2000.

Demon, which provides a full range of integrated Internet services to business and residential customers, has a dial-up subscriber base of more than 175,000 customers. It hosts around half of all UK Web sites.

Further Information:
Sue Clark,                  Director of Corporate Affairs             0141 248 8200
Colin McSeveny,           Media Relations Manager                0141 248 8200

*A conference call with Ian Russell and Rod Matthews, Chief Executive of ScottishTelecom, will be held for analysts at 1130. The dial-in number for this call is 0181-781-0576 and the call reference is ScottishPower.