An icon of Britishness, which recently faced extinction, is being thrown a lifeline.

The traditional red phone box standing by a village green is the quintessential rural scene.

In May, that picture looked set to be destroyed when BT announced plans to remove more than 100 public phones across Leicestershire and Rutland, blaming the excessive cost.

Now, the telecommunications giant has announced that councils can adopt or sponsor a box to keep the traditional alive. They can either pay an annual sponsorship of £500 to keep a phone working, or for a token one-off fee of £1, councils can adopt a box as an ornamental feature, with the phone removed.

On Monday night, Ashby Magna Parish Council, in Harborough district, decided to pay £1 to keep its phone box standing.

Parish councillor Ken Gamble said: "We had letters from villagers saying the phones were part of British culture. We looked at the costs, and as there are only 80 houses in the village, we decided to keep the box, but not the working phone."

Matthew Bradford, head of community services at Harborough District Council, estimated at least 40 parish councils could take up the offer in that district. He said: "Lots of parishes will be interested. It is important to a lot of people."

Saxelbye, near Melton, has fewer than 40 houses and residents say it is a mobile signal blackspot.

The phone box in the hamlet is one of 17 facing the chop in the Melton area, of which seven make less than one call a month.

Mary Fenton, clerk of Saxelbye Parish Council, said the council would ask villagers for their opinion.

Rosita Page, Harborough district councillor and Leicestershire county councillor, said: "People are very passionate about their red boxes, especially as people feel their villages are losing their identity."

Rutland and Melton MP, Alan Duncan, wrote to BT in June suggesting the adoption scheme.

He said: "I'm delighted that BT has agreed to what was always a perfectly-simple proposal to ensure red phone boxes do not disappear into the great grey blur of the modern British streetscape."

A BT spokeswoman said: "We can confirm that local authorities that wish to maintain red boxes – minus the telephone equipment – for aesthetic reasons will able to do so.

"It's for those who like the look of their red box on the village green.

"In addition, local authorities that have requested to contribute to maintenance costs to retain a red telephone box with a working telephone will also be accommodated."

BT will not remove phones between now and October 1 – the deadline for councils to submit their application to adopt or sponsor a kiosk. Once the phone equipment has been removed, the council owns the box.

There are 796 public phone boxes in Leicestershire now, compared with 1,333 in 2002.

Any damages to the box would be covered by BT in the sponsor scheme, but not the adoption scheme, as the parish council would then have ownership.

About 20 boxes in Hinckley and Bosworth, 11 in Oadby and Wigston and 12 in Blaby district are affected.