Prime Minister Tony Blair will keep the media industry in the dark for another six months over whether he will relax ownership rules.
It has emerged that the draft communications bill, which had been expected later this year, will not be presented to Parliament until next year.
Meanwhile, an attempt by Media Secretary Tessa Jowell and Industry Secretary Patricia Hewitt to secure early approval from Parliament to establish Ofcom has hit a snag, jeopardising the Government’s manifesto commitment to establish the new media regulator by 2003.
The delay in publishing the draft bill will be a further disappointment to the ITV companies and the newspaper industry waiting for reform of ownership rules.
The Government will be setting out its initial response to the plea by publishers for a relaxation of the rules, which bar newspapers with 20 per cent of the market from providing a TV service, and to calls from broadcasters for an easing of ownership rules to pave the way for a merger which will create a single ITV.
After publication of the draft bill there will be a further statutory three-month period to allow publishers and broadcasters to make further representations while Parliament also has its say.
The Prime Minister has already disappointed the media by delaying the main legislation until the 2002-3 session, which will not get under way until October or November next year.
Now Jowell’s plans to use a "paving" bill to create Ofcom, before MPs adjourn for their summer break next week, are also likely to be thwarted.
Government business managers in the Lords claim they already have a heavy legislative timetable and have suggested to Jowell and Hewitt that they use their powers to make orders to set up the new body, a move that would cause Parliamentary uproar.
"We are looking at practical measures to get the core of Ofcom up and running quickly," said Jowell.
lBBC director general Greg Dyke warned he could drop a planned £15m investment in digital radio if the corporation’s five new services are not given the go-ahead. The news comes as Jowell confirmed she was delaying her decision until September.
Jowell, who announced she would extend the consultation, said the nine services could not duplicate the commercial sector or be used to justify moving minority broadcasting from the main national services.
Dyke said the BBC would "think again" if the portfolio of services, including Network X, a black music station with a dedicated news and features team, was refused.
By David Rose and Julie Tomlin