Sweeping changes to UK media ownership rules are planned by the British government, setting up one of the world's most liberal broadcasting regimes.

The proposals would lift barriers to US or other non-European companies taking over television networks. They also open the way for large newspaper groups such as News Corporation to take control of free-to-air television and radio channels. The reforms, more radical than expected, include tighter regulation on the BBC state broadcasting company to ensure parity with commercial rivals.

The changes would make it possible for News Corporation to bid for Channel 5, the UK free-to-air channel. News Corporation owns 36 per cent of the BSkyB satellite group, which dominates UK pay-TV but has no foothold in terrestrial broadcasting. Channel 5 is 65 per cent owned by RTL, the European broadcasting group controlled by Germany's Bertelsmann, and 35 per cent by United Business Media.