A new code governing political advertising is to be established, the Electoral Commission has announced.

Launching a review into "non-broadcast political advertising", the elections watchdog said it wanted to make progress on developing new rules based on a principle of self-regulation.

Since October 1999, political advertising aimed at influencing voters in elections or referendums has been exempt from the British Codes of Advertising and Sales Promotion, which are administered by the Advertising Standards Authority.

The decision to exclude political advertising followed concerns raised after the 1997 general election.

Some feared that the independence of the advertising industry's system of self-regulation could be damaged by rulings for or against political parties.

The commission expressed concern that since the problem was identified in 1998, political parties and the advertising industry had failed to agree to a new code of conduct.

Under current rules, political parties are banned from buying advertising space on TV and radio - but can buy advertisements on billboards and in newspapers.

Announcing the review, the Electoral Commission chairman, Sam Younger, said: "Political advertising always has the potential for being controversial, so there is a real need to review the case for a code on political advertising."