Britain's communications regulator recommended relaxing rules on ownership of local media to help commercial providers of regional news struggling to survive a slump in advertising.

If approved by the government, the new rules recommended by Ofcom would allow radio operators to consolidate around a local area, helping independent commercial operators compete with the state-funded BBC.

They would also liberalise cross-media ownership regulations to the extent that the only banned combination would be to own a local radio station, local newspapers with majority local market share, and a regional channel 3 TV licence all at once.

The changes could benefit radio operators such as Bauer Radio, Global Radio, Guardian Media Group, Virgin Media and UTV Media.

It could also help regional newspaper group Johnston Press as well as national groups such as Trinity Mirror and Daily Mail & General Trust, who own numerous local titles.

Ofcom has also said that new funding is needed to provide regional news on Britain's main commercial TV network because the cost of paying for broadcasting licences will outweigh the benefits by 2012.