Children's charities have expressed "serious concerns" many UK households still have access to images showing child sex abuse via their computers.
The government had asked all internet service providers (ISPs) to block illegal websites by the end of 2007.
But firms providing 5% of broadband connections have still failed to act.
One of them, Zen Internet, said in a statement: "We have not yet implemented the IWF's recommended system because we have concerns over its effectiveness."
It is understood other ISPs have cited the cost of blocking the illegal material as a reason not to participate in the scheme.
This is a battle over the merits of self-regulation versus legislation
Rory Cellan-Jones
BBC's Technology correspondent
Read Rory's thoughts in fullBut the NSPCC's Zoe Hilton said: "Allowing this loophole helps feed the appalling trade in images featuring real children being seriously sexually assaulted."
The blocked websites come from a list supplied by the Internet Watch Foundation (IWF), but some smaller providers refuse to use the list.
Easy access
The Children's Charities Coalition on Internet Safety (CCCIS) says self-regulation is not working and it is calling for firmer action by the government.
Ms Hilton said: "Over 700,000 households in the UK can still get uninterrupted and easy access to illegal child abuse image sites.
The government is currently looking at ways to progress the final 5%
Home Office minister Alan Campbell
"We now need decisive action from the government to ensure the ISPs that are still refusing to block this foul material are forced to fall into line. "Self-regulation on this issue is obviously failing - and in a seriously damaging way for children."
Home Office Minister Alan Campbell said: "In 2006 the government stated that they wished to see 100% of consumer broadband connections covered by blocking, which includes images of child abuse, by the end of 2007.
"Currently in the UK, 95% of consumer broadband connections are covered by blocking. The government is currently looking at ways to progress the final 5%."