Internet service provider Xtra has served up a nasty Christmas surprise for thousands of internet users, blocking access to its email accounts for subscribers of rival services.

The move has created headaches for internet providers whose helpdesks have been inundated with calls from customers who cannot receive email.

It is being seen as anti-competitive and a tough response to regulatory changes that have given Xtra owner Telecom's rival TelstraClear access to better pricing.

On Friday, Xtra begun blocking access to "POP3" email accounts used by customers accessing the web with a competing internet provider but keeping an Xtra email address.

Zip Internet customer Catherine Smith yesterday found herself unable to receive email sent to her Xtra address. She was now looking to shift web hosting companies from Xtra to another provider.

"If their rationale was for me to put all my business into Telecom or Xtra, I'm doing the reverse," she said.

Steve Christie, the manager of Nelson internet provider Tasman Solutions, said the change cut email access to around 50 per cent of his Pacific Net customers, who subscribe to a wireless broadband covering parts of Nelson and Westport.

"Here they are trying to encourage broadband connections, which we've leapt ahead and done, and the idiots go and do something like this."

A clause in Xtra's terms and conditions, likely overlooked by most email users signing up with the company, states that accessing Xtra email through another internet provider is not a service "specifically approved by Xtra".

"Xtra may add to, replace, block or remove alternative access or hosting services previously offered or approved by Xtra without notice to you," its website says.

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