Digital TV and the promise it holds is more than ITV Digital

Tessa Jowell Culture Secretary

In a Commons statement, Ms Jowell defended the government's decision not to bail out ITV Digital.

"The hard truth is that this is a failure of a company, not a technology," she told MPs.

She said there were already "new players" waiting in the wings to "make this proposition work".

"Digital TV and the promise it holds is more than ITV Digital," she added.

Consumer-driven

She also reaffirmed the government's commitment to switching off the analogue TV signal, which most people currently receive, by 2010.

But she stressed the switchover must be driven by consumers.

She added: "There is always a risk in such ventures, especially in relation to markets built on new technology.

Our chance of dominating one of the 21st century's most promising industries is in danger of being thrown away

Tim Yeo Conservative culture spokesman

" It is precisely for this reason that I would not intervene directly on what is essentially a private matter between a company and its creditors.

"The government's role is to protect the wider public interest."

Ms Jowell said that if ITV Digital ceased to provide a service, the Independent Television Commission would revoke its licence and re-advertise for potential bidders.

Shadow culture secretary Tim Yeo said the government's lack of leadership was threatening Britain's dominance of the digital industry.

The collapse of ITV Digital had been known for some time yet the government had "done nothing to address the problems or lay foundations for a solution," he told MPs.

Football crisis

Nick Harvey MP, Liberal Democrat Culture spokesman said: "If Digital Terrestrial Television is going to succeed, a big effort must be made by the government and terrestrial broadcasters, most notably the BBC, to create and promote a free to air platform.

"TV users, largely content with the existing service, are not going to choose a monthly subscription for a new service. If it is going to be successful DTT must be available free to all."

ITV Digital moved a step closer to being broken up on Thursday when its administrators Deloitte & Touche said they were offering the company's assets for sale.

The administrators added that they were still hopeful of finding a buyer for the business as a going concern.

The situation could spell financial disaster for dozens of UK football clubs in England's First, Second and Third divisions, due for a slice of TV rights money.

The Football League, which oversees the divisions, is owed �178.5m by ITV Digital in TV rights.

The league has pledged to sue ITV Digital's owners, media firms Granada and Carlton, for the money, but there are fears some clubs could go under before any case was settled.

Supporters' Trusts

Ms Jowell said it was a "great shame" that the clubs had not been able to reach an agreement with the broadcaster over the cash.

She said: "Football hasn't asked the government to bail it out financially but we want to do all we can to offer clubs support at this difficult time."

Practical help would be offered through the government's Supporters Direct initiative, which helps fans gain a financial stake in their local clubs through supporters trusts.

Football rights

If ITV Digital is broken up, the rights for televising League games would revert to the clubs, who would be free to find a new buyer for the contract.

But it is highly unlikely they would receive offers anywhere near as lucrative as those made by ITV Digital.

Carlton and Granada are believed to have refused to continue funding ITV Digital because of concerns over the length of time it would take to transfer its broadcasting licence to a buyer.

Free-to-air digital terrestrial channels such as BBC Choice, BBC News 24, BBC4, ITV2 and ITN News should continue to be available to ITV subscribers, even when the pay-TV service ceases.