ITV public-service plans under fire

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The group, which has four million viewers and licences for north and central Scotland, said it completely disagreed with ITV, which wants regulator Ofcom to create a single UK-wide Channel 3 licence.

The radical stance by the regional broadcaster is the second major blow to ITV chairman Michael Grade in two days. The Competition Commission yesterday said it had found major competition problems in Kangaroo, the video-on-demand venture ITV was planning to launch with BBC Worldwide and Channel 4.

In its submission to Ofcom today, STV also rejected ITV's claim that it subsidises the Scottish company and its Northern Irish counterpart, UTV Media, with £25 million a year.

Grade is desperate to drop as much of ITV's public-service remit as possible, which he has said costs the network more than £200 million a year. Ofcom has already indicated it is prepared to let ITV reduce the scale of its regional news coverage, which has led to hundreds of job losses.

But STV chief executive Rob Woodward said: "STV is at the core of a strong creative industry in Scotland. We employ 35 people directly and 500 freelancers and are committed to providing plurality and choice for Scottish viewers via our popular news service."

He said the current system of separate Channel 3 licences for the nations and regions of the UK, acting under a light federation network, was the best way to serve local audiences.

"The current model is not broken. It simply needs modernising," he added.

STV said it had calculated that the network system, rather than costing ITV money, was worth as much as £227 million a year to the broadcaster. The vast bulk of this came from ITV's ability to use programmes made for ITV1 on its digital channels at "virtually no cost" and to promote ITV2, 3 and 4 and itv.com on ITV1.