The BBC Trust on its website today confirms that it has refused permission for the BBC's £68 million plan to expand local video on its regional websites after concluding its public value test into the proposals.
The proposal provoked fierce opposition from the regional press which has its own plans to develop local websites at a time when its circulation and advertising revenues are under threat from the internet.
In its announcement today, The Trust says its "final decision follows a public consultation on its provisional conclusions, published in November, to reject local video because it would not improve services for the public enough to justify either the investment of licence fee funds or the negative impact on commercial media."
Diane Coyle, BBC Trustee and chairman of the Strategic Approvals Committee, said: "The Trust is committed to improving regional and local services from the BBC for licence fee payers but a broadband-only local video news proposal is unlikely to achieve what they want.
"Instead, we believe the BBC's priority should be improving the quality of existing regional services. We recognise that the ways of achieving this may vary in different parts of the UK. We have asked the Executive to come back to us with new proposals later this year which will then be fully scrutinised by the Trust."
The Executive has outlined its emerging thinking in a submission to the Trust which is published today. Funds totalling £68 million that would have covered the four-year period from the launch of local video have been ring fenced pending any new proposals, subject to Trust approval.