A new generation of futuristic mobile phones - which have already cost £ 22 billion - may never appear, a leading expert warned last night.

Professor Peter Cochrane, who until recently led BT's research into the revolutionary sets, said some telecom giants could collapse under the cost of the project.

The third-generation - 3G - phones would allow high-speed Internet and video links. Sophisticated handsets would be able to guide drivers through towns and cities and allow people to play computer games across the world.

Companies including BT, Vodafone, Orange and One2One were so keen to exploit the technology that they paid a total of £ 22 billion in a Government auction for the licences. But Prof Cochrane said: 'I am not all that optimistic at seeing 3G as a major force in the UK ever. I think it's really quite simple.

'People want a service that gives them some benefit, is easy to use and understand, and it is low cost. The big question is will 3G hit all those buttons and the answer is, I don't think so. I think it's too expensive and it's getting rather too complicated. I don't think we are going to see 3G.'

He called the multi-billion-pound auction 'a really good study in madness'.

'It was a bit like lemmings going over the edge of a cliff,' the professor added. 'Make no mistake about it, this is a fairly serious game of poker. Some people are betting everything on this technology. If they can't find a solution, I think we will see companies collapse.'

It is estimated that the phone giants will need to build up to 28,000 extra masts and stations for 3G technology.

Yet, despite the hurdles, the companies were remaining optimistic last night.

Richard Brennan, of Orange, said: 'If we were to paint a picture of 3G, it would be a world where you have this remote control for life.'

Kent Thexton, from BT, added: 'Sixty per cent of the population have found a way to put into their monthly expenditure their mobile phone bills - what we're talking about is adding to that.'

Prof Cochrane gives his warning on The Money Programme tonight on BBC2.