ITV 'to gain licence fee share'

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Culture Secretary Ben Bradshaw outlines proposals for the licence fee

ITV could benefit from up to £130m a year of BBC licence fee money to pay for regional news and children's programmes, the government has said.

Ministers will consult on whether 3.5% of the fee should go to ITV and other public service broadcasters from 2013.

Money left over from the costs of switching over to digital TV by 2012 could be used to fund pilot schemes.

Culture Secretary Ben Bradshaw outlined the plans as part of the government's Digital Britain report.

'Slush fund'

BBC Trust chairman Sir Michael Lyons rejects sharing funds

Mr Bradshaw said in the House of Commons that the BBC did not have "exclusive rights" to the licence fee and should evolve as a "public service partner" with other outlets.

But he added that any alternative proposals from any parties would be welcomed.

The BBC's media correspondent Torin Douglas said the £130m annual fund currently used by the BBC for digital switchover costs could be permanently moved to other broadcasters.

But there must be a series of consultations before the plan could be put into place, he added.

The BBC Trust has come out against the government's proposals, saying removing part of the licence fee would "damage BBC output".

Trust chairman Sir Michael Lyons said it "must not become a slush fund to be dipped into at will".

READ THE DIGITAL BRITAIN REPORT Digital Britain report(3MB) Most computers will open PDF documents automatically, but you may need to download Adobe Acrobat Reader. Download the reader here

"This would lead to the licence fee being seen as another form of general taxation. The trust will not sit quietly by and watch this happen," he added.

'Forced marriage'

Lord Carter, author of the Digital Britain report, said that a proposed merger between BBC Worldwide - the corporation's commercial arm - and Channel 4 would not be "a forced marriage", but that the government "would be ready to facilitate it".

Referring to a consultation, he said the government would not be "running a referendum on it" but would take the views of licence fee payers into account.

Channel 4's chief executive Andy Duncan welcomed the report, saying it "offers crystal clear acknowledgement of Channel 4's vital role in ensuring public service competition to the BBC".

Digital radio is at the heart of the proposals

He added talks towards a merger with BBC Worldwide had made "considerable progress".

Lord Carter's Digital Britain report also says that all national radio stations are set to be upgraded to digital by 2015.

The date of the upgrade - on which stations will cease broadcasting on FM - will be announced two years in advance.

The government has outlined plans to work with vehicle manufacturers to provide digital receivers, and radio sets which cost £20 or less.