The BBC is set to be stripped of some of its television licence fee to fund local news provided by other organisations such as STV.

Ben Bradshaw, the newly appointed Culture Secretary, revealed details of the proposal in a wide-ranging statement. Speaking to MPs on Tuesday, he said ministers would consult on sharing a "small element" of the licence fee with other providers after 2013 and, sooner, establish pilot projects in Scotland and elsewhere.

He also promised tougher measures to crack down on illegal file-sharing and announced a "small levy" would be imposed on fixed telephone lines to help pay for an expansion of high-speed broadband.

Mr Bradshaw said the UK Government intended to upgrade all national radio stations from analogue to digital by 2015. The government is also set to implement a new "more robust system" of content classification for the video games industry to protect children.

The proposals were drawn from the Digital Britain report released on Tuesday by Lord Carter. It said the changes would help "accelerate Britain's recovery from the biggest economic shock the world has seen since the Second World War".

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RESOURCE

Final Digital Britain Report (pdf)

Video: Extracts of Ben Bradshaw's statement to Commons

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Although welcomed by media organisations seeking a more equal footing with the BBC, the proposals received an unfavourable response from some.

Jeremy Hunt, shadow culture secretary, said the document was a "colossal disappointment". The Tory MP said: "Taking money from the BBC to prop up regional news is the wrong solution to the wrong problem.

"We need a new model for local and national news in the digital era - simply running to the licence fee ducks the issue and could also undermine the BBC's plan to increase its investment in Scotland."

In defending the measures, Mr Bradshaw said a "strong, confident and independent" BBC was "more important than ever". But the former BBC employee said it was in the corporation's interest to evolve into a "public service partner" with other media outlets.

He said the government had been encouraging talks between BBC Worldwide and Channel 4 and "we are ready to help in any way we can". A cash-hungry Channel 4 has long been seeking funding through non-traditional sources, and it has welcomed a proposal from the report to work with BBC's international arm to share content and revenue.

Mr Bradshaw said he agreed with concerns raised by MPs about the need for a "plurality of provision" of local and regional news and welcomed the BBC's response supporting partnerships - but said that alone would not be enough.

Turning to the licence fee, he said there was "nothing in either the BBC Charter, or legislation, to say that the BBC must have exclusive rights to it".

He told MPs: "Independent of the level at which the licence fee is set after 2014, we will consult on the option of sharing a small element of it post-2013 to help ensure high quality, plural provision, particularly in the regions and nations."

Pilot projects will be set up in Scotland, Wales and one English region before 2013, he said. Part of the licence fee could be ring-fenced to pay for public service programmes on non-BBC channels, which could amount to £130million a year from 2013.

STV, the Scottish broadcaster of ITV programmes as well as local news and original content, welcomed the proposals.

In a statement, STV said: "We are delighted that Scotland has been selected to run one of the three pilot channel 3 news services in the UK. Assuming adequate funding is provided this will enable our viewers to continue to enjoy STV's Scottish news and provide strong competition to the BBC.  

"Earlier this year, STV volunteered to run a ground-breaking news pilot in Scotland, which would see us sharing our news content with other commercial news organisations, and on the back of today’s announcement, we are hopeful that funding will be made available for such initiatives from 2010.

"We are pleased that the government supports the case for granting STV Productions the same benefits as independent producers, which would certainly help fast-track the development of a vibrant creative cluster in Scotland and create jobs in a key growth sector.  We will participate fully in the forthcoming legislative consultation and look forward to a speedy implementation.

"Overall, this is a positive report which recognises the important role that strong, relevant home-grown production plays in this multi-platform digital age."

In a strongly worded statement, BBC Trust chairman Sir Michael Lyons said the body would not sit back quietly if the licence fee were to be used as a "slush fund".

He said: "The licence fee must not become a slush fund to be dipped into at will, leading to spiralling demands on licence fee payers to help fund the political or commercial concerns of the day.

"The Trust will not sit quietly by and watch this happen."

Michael Russell, Scottish Culture Minister, expressed disappointment that the report failed to address a recommendation north of the border for a dedicated digital channel for Scotland.

He said: "This is a missed opportunity for the UK Government to declare its support for public service broadcasting in Scotland. The decision not to endorse a digital network is particularly disappointing given the need for a choice of public service broadcasting in Scotland was recognised in both the interim Digital Britain report and in Ofcom's recent Review of Public Service Broadcasting.

"As the independent Scottish Broadcasting Commission identified, a digital network is considered the best option to achieve the choice in public service broadcasting that viewers in Scotland need, value and deserve. That is exactly why the case for such a network was endorsed by every party in the Scottish Parliament in December of last year."

Mr Russell noted the UK provides £95million of funding to the S4C channel in Wales, in addition to £25million of support which is provided from BBC licence fee revenues.