Michael Palin caused uproar by swearing at tea time

Ofcom is due to take over the Independent Television Commission's (ITC) role in December.

ITC chief executive Patricia Hodgson praised Ofcom's plans to be a "light touch" regulator, but said it needed to take the lead in enforcing rules like the 2100 "watershed" for adult programming, and on privacy.

"There is little consensus in the UK on taste and Ofcom should be relatively hands-off, but there are real concerns where children are affected," she said.

"We need to be firm with free-to-air services about the watershed and, for cable and satellite services, make sure parental controls are well-publicised and effective."

Have your say Are there too many soaps on TV?

Ofcom should have the courage to meet public concerns over "fundamental values" like human decency, privacy and dignity, she added.

The issue of the 2100 watershed was raised most recently when Michael Palin swore on his Sahara programme on BBC One, transmitted in the early evening.

The Broadcasting Standards Commission censured the BBC for the incident.

The ITC's final report, released on Tuesday, said Ofcom would also need to make sure there was enough competition in the UK broadcasting industry.

Targets for broadcasters should also be enforced, while public service broadcasters should have adequate funding to do their jobs properly, it said.

With Ofcom taking over commercial TV and the BBC's charter up for renewal in 2006, the ITC said this provided an ideal time to set standards for the future.

"A way forward for the long term is likely to be needed if British viewers are to benefit not only from many new services made possible by technology, but also from the high quality and diversity of British programme-making established over past decades."

Difficult year

The report said the TV industry had a difficult year in 2002, with ITV Digital's demise, trouble for cable giants NTL and Telewest, and an advertising recession.

Sir Trevor McDonald: Some Tonight shows came in for criticism

But it noted that Channel 4 and Five had increased advertising revenues and audience shares.

ITV had a "patchy performance" in 2002, it said, and soaps had reached saturation point during peak hours.

The ITC warned: "The introduction of a fifth weekly instalment (of Coronation Street) in addition to five editions of Emmerdale is in danger of posing a threat to diversity in peak time."

Emmerdale is on daily at 7pm throughout the week and Coronation Street is screened on four nights with a double bill on Mondays.

Between them the shows account for five hours of viewing in peak-time - 6pm to 10.30pm.

ITV was also ticked off for scheduling the South Bank Show after 2300 on Sundays, while some editions of Tonight With Trevor McDonald "stretched the definition of current affairs".

"Other programmes extended the choice but overall there was insufficient analysis, international coverage and investigations," it said.

The ITC also said it was monitoring ITV's news output after a change of "tone and agenda".

But the commission said new investment had helped the network's fortunes at the beginning of this year, and it praised ITV's drama, comedy, entertainment and "impressive" children's programmes.

Channel 4's current affairs and arts shows were praised, but its drama output was "disappointing".