- The Government is ready to allow the BBC's public service internet site to carry ads, but will reject calls by advertisers for them to run on television and radio.
Chris Smith, the Culture Secretary, believes there is no reason why the BBC should not carry ads on BBC Online, its successful internet service, to raise funds.
Although BBC Online is part of the BBC's public service remit, Smith believes an anomaly has arisen because Beeb, the smaller Internet operation run jointly by BBC Worldwide and ICL, already carries ads.
The idea of advertising in BBC Online may be raised in a Government-ordered report on the corporation's funding later this month by a committee chaired by Gavyn Davies, the millionaire City economist. Ministers have asked it to consider whether ads should be carried by channels such as BBC News 24.
However, the Government will disappoint the Incorporated Society of British Advertisers by ruling out ads on BBC1 and 2 and Radios One to Five - to the relief of BBC bosses. "We see no justification for ads on the BBC's core services," one minister told Campaign this week.
The Government will study the Davies report before giving its final verdict before the end of the year. It is expected to give Greg Dyke, the new director general, a breathing space by pledging that the licence fee will continue at least until the next review of the corporation's charter in 2006.
Meanwhile, ministers may reject the BBC's demand for a £30 top-up to the licence fee for people buying digital sets to fund its expansion into digital TV. After strong opposition from the BBC's rivals, the Government may allow only a much smaller top-up.
This article was first published on Campaign