The licence fee will also be used to fund projects beyond the BBC, according to the Digital Report, which was unveiled today.

New culture secretary Ben Bradshaw, confirmed to the House of Commons that the government planned to use the expected £200m so-called "digital switchover surplus" from the licence fee to help provide universal access to broadband, ITV local news pilots and children's programming. This prospect was first floated in the interim Digital Britain report in January.

As part of the announcement Bradshaw also said that a "small levy" of 50p a month would also be placed on all fixed phone lines to help pay for next-generation broadband for 90% of the population.

He added that a "small part" of the licence fee digital switchover surplus would fund three ITV regional news pilots in Scotland, Wales and one English region between now and 2013.

ITV has said it will pull out of providing regional news because it can no longer afford to fund it – but will continue to provide airtime for other media organisations to supply replacement programming.

Bradshaw said that once the licence fee settlement is up for renewal after 2013, the government would consult on the option of sharing a "small part" of the annual £3.4bn, but said the government was open to other options.

The BBC has been lobbying hard to protect the licence fee, but Bradshaw said: "There is nothing that says the BBC must have exclusive rights to it."