The move represents the single largest investment in broadband digital infrastructure in the country for more than a decade and has been welcomed by David Cameron, the prime minister, for its promise of creating 6,000 new jobs and providing a multi-billion pound boost to the economy.
Virgin Media, with the backing of parent company Liberty Global, plans to add four million additional households and businesses over the next five years.
This will increase the number of homes and businesses to which Virgin Media can offer services by almost a third – from around half of the country today to nearly 17 million premises by 2020.
The expansion programme is expected to create 6,000 new jobs across the country, including roles to support engineering and sales efforts.
It also stands to increase the number of apprenticeships created by Virgin Media to 1,000 during the next five years.
The substantial investment will be financed mainly through incremental borrowings. Analysis undertaken by leading economic consultancy Oxera has found that this investment can be expected to stimulate a combined £8 billion of economic activity and consumer benefit.
Cameron said: "I welcome this substantial investment from Virgin Media which is a vote of confidence in our long-term economic plan to support business and create jobs by building a superfast nation backed by world-class infrastructure.
"These 6,000 new jobs and apprenticeships will mean financial security and economic peace of mind for thousands more hardworking families across the country.
"Together with this Government’s rollout of superfast broadband, which has now reached more than two million UK homes and businesses, this additional private investment will create more opportunities for people and businesses, further boosting our digital economy and helping secure a brighter future for Britain."
Tom Mockridge, chief executive of Virgin Media, said: "Millions of homes and businesses will soon be able to benefit for the first time from broadband speeds at least twice as fast as those available from the other major providers.
"Consumers and business owners who want to make the switch to better broadband speeds now have an alternative. You can call on Virgin Media to ‘Cable My Street’."
Households connecting to Virgin Media for the first time will benefit from broadband speeds of 152Mb – at least twice as fast as the fastest speeds available from BT, TalkTalk and Sky.
Mike Fries, chief executive of Liberty Global, said Project Lightning "demonstrates the confidence we have in Virgin Media and the UK as a place to do business".
Project Lightning comes as the number of internet-enabled devices continues to grow year on year, with homes and businesses increasingly connected to multiple devices simultaneously.
Sixty per cent of Virgin Media customers now have at least three devices connected to their home broadband, up from 37 per cent a year ago.
Data usage on the Virgin Media network is currently growing at a rate of around 60 per cent every year which, if this trend continues, will be 10,000 per cent higher in ten years.
Virgin Media is asking consumers and businesses to register interest in network expansion that will be prioritised according to demand.