Simon McCoy can currently be seen on Sky News Sunrise

The Sky News deal will be seen by some as a breakthrough for parent company BSkyB, which has repeatedly failed to win contracts to provide news for terrestrial channels.

But this tie-up could make it better-placed to challenge when new contracts come up for renewal.

"The deal will bring Britain's most popular 24-hour news service to an audience who might never have seen Sky News before," the channel's head Nick Pollard said.

"We hope that once they've sampled it, they'll want more."

ITN was forced to slash the price it charges ITV for news

Sky News Sunrise will be simulcast on Channel 5 between 0600 and 0630 each weekday - a slot that is currently watched by less than 30,000 people per day.

It will also be shown between 0700 and 0800 on Saturdays, with coverage starting on 7 January.

It will continue to be presented by current anchor Simon McCoy, who will be joined by former BBC Breakfast host Julie Etchingham in February.

Sky News will also make some topical documentaries for Channel 5 in 2002.

They will be "short turnaround" - quickly-made - documentaries that will look at major news stories in depth.

The contract with Sky News... in no way reflects on our relationship with ITN

Chris Shaw Channel 5

The deal will be seen as a blow to ITN, which has recently shed 82 jobs as a result of being forced to cut the cost of its news for ITV thanks to competition from a consortium backed by BSkyB.

The UK media recession was also blamed for the job losses.

But Channel 5's senior programme controller of news and current affairs Chris Shaw said the channel was "very happy" with the ITN's news service.

The Sky News agreement "in no way reflects on our relationship with ITN," he said.

Big stories

Channel 5's three main news bulletins - made by ITN - currently attract a total of 1.5 million viewers per day.

Channel 5 will continue to switch to live coverage from ITN if there is a big news story, such as the 11 September attacks.

ITN's contract with Channel 5 is due for renewal in January 2005, when BSkyB could challenge to become news provider as it did unsuccessfully in 1999.

ITN has beaten BSkyB in tenders to produce UK terrestrial TV and radio news services five times in the last five years.

Sky has provided news for mainstream TV stations before - it produced bulletins for ITV's breakfast station TV-am, which closed nine years ago.