The government and the BBC were on a collision course on Friday after it emerged that next week’s Digital Britain White Paper will propose carving out more money from the licence fee than previously thought.

People familiar with a late draft of the paper, which maps out the future of the country’s creative and communications industries, said that its author Lord Carter proposed as expected that some of the BBC’s funding should be used to pay for independent production companies to make regional news programmes on ITV. The cost of the scheme has been estimated at £40m to £100m, depending on its scope.