Tim Yeo

Shadow culture secretary Tim Yeo has warned of the threat posed to the expansion of digital television by the difficulties facing struggling broadcaster ITV Digital.

But culture, media and sport minister Kim Howells rejected calls to intervene to protect the future of ITV Digital.

During questions in the Commons on Monday afternoon, Howells said that reports on the difficulties facing the terrestrial digital TV platform were "speculation".

Last week, ITV Digital asked the Football League to waive the payment of around £180 million owed under the contract to screen first, second and third divisions matches in England and Wales.

Amid rumours that ITV Digital's owners, Granada and Carlton Communications, were prepared to close the company, the league ruled out any renegotiation on the contract and threatened legal action.

ITV Digital has so far cost the two companies £800 million and is estimated to need a further £300 million before it breaks even. Shares in the two owners dropped on Monday.

Shadow culture secretary Tim Yeo said the government's plans for digital terrestrial, satellite and cable services - to be set out shortly in the Communications Bill - could become "pie in the sky" if the situation got worse for ITV Digital.

"The success of digital terrestrial television depends on effective competition between at least three providers," warned Yeo.

He blamed "dithering" by ministers for putting services to subscribers of ITV Digital at risk.

"Everyone is aware there are acute problems there...the government has absolutely no strategy to address those problems."

But Howells said he would not be "speculating on the likely outcome of discussions of on the future of ITV digital".

And he told Yeo: "All that rant achieves is to further undermine the position of some very important companies."

Liberal Democrat spokesman Nick Harvey urged the government to ensure everyone could get access to a digital TV through a one off payment rather than subscribing to services they may not want.

The minister was also pressed by Rhondda MP Chris Bryant to "ensure that some form of digital terrestrial television does survive in the future".

Howells said the government had maintained a position of being "platform neutral" on the matter "and we have to stick to that position".