BBC offered pounds 200m sell-off proceeds

THE GOVERNMENT is considering handing the BBC the proceeds from privatising its transmitter network - on condition that it pledges to invest the money in new digital technology capable of launching a BBC3 and BBC4 by 1997.

The privatisation, which could net the Treasury up to pounds 200m, was recommended in last week's White Paper on the future of the BBC, but the compromise is on the table as part of a wide-ranging policy to introduce digital TV to Britain.

Whitehall sources described the quasi-privatisation as a 'carrot on a stick' approach: the Government wants the BBC to kickstart digital TV, but it cannot justify financing it out of licence payers' money. The revolutionary technology, likened to the transition from black and white to colour TV, will increase the number of national channels from four to 16. According to the White Paper, it could create up to pounds 5bn in new business for the UK.

But privately the BBC hopes to avert a sale, as it is worried that any windfall would give ammunition to those who want the licence fee reduced.

Last week, Michael Starks, the man responsible for introducing the internal market at the BBC, was asked to head the digital project.

Meanwhile, the BBC is forging ahead with plans for two new channels in Europe as part of a new alliance with Pearson, the group that owns the Financial Times and Thames TV. It is understood an agreement has been struck that would give the BBC up to 50 per cent in the new channels, in exchange for programme supply.

Bob Phillis, the BBC's deputy director general, said that the BBC and Pearson are talking to another British company and a European-based group with a view to offering them a role in the European channels. The two companies that join the BBC/Pearson alliance might be offered stakes in the venture of between 10 and 20 per cent. He declined to name the other companies, although industry sources suggested that one of them might be the news agency Reuters.

Mr Phillis said that he hoped the BBC would be able to treble or quadruple revenues from commercial activities in the next few years, so that they would account for 15-20 per cent of the organisation's total revenues.

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