Rules restricting media ownership are set to be ditched in a bid to increase competition, parliament has been told.

As expected, the long-awaited communications bill will scrap limits on media ownership of some TV channels.

Ownership will be the most controversial issue as the government has chosen to ignore the advice of the committee headed by film director Lord Puttnam.

His committee, which was set up to scrutinise the draft bill, warned that opening the door to global media giants such as Disney or Time Warner could lead to broadcasters relying on cheap, imported programming.

The committee predicted a move "away from domestic content produced primarily with a British audience in mind, towards a more US or internationally focused product mix".

The opposition is divided over the plans.

The Conservatives believe the government will not go far enough in liberalising the market while the Liberal Democrats believe the bill is a step too far.

"We will be pressing for further relaxation of the rules, while at the same time arguing for the BBC to be subject to the same regulatory regime as other broadcasters," said shadow culture secretary, John Whittingdale.

Nick Harvey, Lib Dem media spokesman, warned that ministers were moving too far, too soon on ownership.

"We would have some very real concerns about the impact it would have in thwarting and throttling British creativity," he said.

The bill will also set out the powers of the industry's new super-watchdog Ofcom.

Critics had attacked the bill for leaving regulation of the BBC with its board of governors.

In a bid to counter the claim the government has decided that the corporation will also be liable to fines from the new regulator.

The legislation's key aims are "promoting competition, investment and giving powers to the Office of Communications".

The new regulator will take joint powers for the industry with the Office of Fair Trading and establish a content board to ensure radio and TV meet quality standards.

There will be an end to the limit on the number of radio stations a company can own and greater self-regulation.

A consumer's panel will also be set up to advise Ofcom.

The act will, the department says, "create the most dynamic and competitive communications industry in the world; provide universal access to a choice of diverse services of the highest quality; ensure that citizens and consumers are safeguarded".