Affinity Internet Holdings - which provides white label ISP services for companies including Powergen, the Royal Bank of Scotland and WHSmith - has flogged its Internet operation.

An outfit called Cleverview Investments Ltd has bought the whole of Affinity's ISP operation for £250,000. It has also taken on the debts of Affinity's Internet business.

Instead, AIH intends to concentrate on its profitable mobile and fixed line telephony business. And as part of the agreement, AIH has also been allowed to continue using the breathe brand to market its telecoms services under the breathe name.

Affinity's Internet services business generated a turnover of £10.6m and operating losses of £6.5m in the nine months ended 30th September 2002 - just under 20 per cent of Affinity's total revenue.

In a statement AIH chief exec, June May, said: "Affinity's strategy has not changed. The agreement will enable Affinity to continue to sell white-label, integrated communications services using the breathe services.

"Affinity will now be able to focus on delivering our profitable mobile and fixed line telephony business. The agreement will improve Affinity's operating performance in 2003," said May. ®