BBC digital plans mired in legal threat furore

BBC plans to launch two new digital channels have been met with an angry reaction by rival channel operators who claim their own offerings will be diluted and their livelihoods threatened if the BBC is given the go-ahead for its £300m launch.

Digital television companies are calling for a judicial review if the government approves the proposed channels - BBC3 and BBC4 - on grounds that the corporation did not answer questions concerning its market impact and target audience.

The BBC was required to prove its new offerings will not overlap with existing channels covering the areas they are planned to cater for - including the hotly contested area of children's programming which BBC3 will cover, if approved. The companies say the BBC failed to provide satisfactory answers on this issue when quizzed by the Department of Culture, Media and Sport and are now lobbying culture secretary Tessa Jowell in a bid to block their launch.

Another source of concern is the BBC channels being funded by licence-fee payers' money.

According the Financial Times, Nickelodeon UK, a joint venture between Rupert Murdoch's Sky empire and US company Viacom, has claimed it will be hit hard by the BBC's planned foray into digital programming for the children's television sector. But many of the concerns raised are for companies smaller than the likes of Nickelodeon or US giant Disney who is also complaining about the proposed launch.

Having taken years to become established with the backing of private investors other, smaller, companies claim it is unfair that the UK government is now set to hand the BBC enough money to take up a dominant place in the market almost overnight and claim BBC3 and BB4 will put many of them out of business.

The government has extended a review period to hear both sides' arguments.