The BBC is planning an Arab-language TV station that would offer news and discussion programmes 24 hours a day across the Middle East.
Al-Jazeera rose to prominence during the Afghan war
The Foreign Office, which would provide funding, and the BBC World Service have been in talks about developing a proposal for the station.
If it is given the go-ahead, it could potentially offer an alternative to satellite stations such as al-Jazeera.
The proposed channel would also be available to Arabic speakers in the UK and Europe.
A BBC World Service spokeswoman said there had been "discussions about the changing media scene in the Middle East, and in the light of the growing impact of regional satellite TV services in Arabic".
Planning is still in the early stages and there is no indication of when the channel could be launched.
The BBC has previously entered the Arabic television market, in conjunction with the Saudi-owned company Orbit, but it foundered in 1996 following issues of editorial control.
That same year al-Jazeera launched, based in Qatar, and recruited a number of former BBC Arabic staff members.
Al-Jazeera grew in popularity and international recognition during the recent war in Afghanistan.
The Foreign Office already funds the BBC's World Service radio stations.
BBC World Service is the largest international radio news broadcaster in Iraq, recent audience figures showed.
The launch of FM broadcasts in Baghdad, Basra and other major cities gained a weekly audience of 1.8 million.
The worldwide audience for the English language service is estimated at 45 million.
In February, the US government funded a satellite channel called al-Hurra, meaning The Free One, broadcast from Washington to the Arab world.
Despite assurances that it is editorially independent, it has still faced criticism in some quarters.
The Syrian newspaper Tishrin said: "This station is part of a project to re-colonise the Arab homeland that the United States seeks to implement through a carrot-and-stick policy".
The US has in turn criticised Arab-language news services, claiming they incite hatred and violence by
"slanting" the news about events in Iraq.