Home Secretary Theresa May suggested today that the BBC may need to curb its activities at a local level to protect local newspapers.
She said: "If the BBC can provide all the locally-significant news, what reason is left for local people to buy a newspaper? That's as dangerous for local politics as it is for local journalism.
"The BBC has to think carefully about its presence locally and the impact that has on local democracy."
Asked what the Goverment was prepared to do to limit the impact of the BBC on local newspapers, May said: "One of the challenges is delivering changes in behaviour without doing precisely what you woudn't want us to do, to ban particular forms of media outlets from operating in particular media markets.
"There's a need for the BBC to think about its own mission and the impact it has."
Talking about the BBC's news website, she said: "It has dominated the market in a way that stops others from coming in."
But she added: "If you think the Government is about to legislate we are not."
May touched on the current debate over the cross-party Royal Charter on press regulation only to signal her support for it and to say to the assembled editors: "I hope that if we can try to trust one another we can make it work."
Telegraph Media Group head of legal Adam Cannon told the Home Secretary that his title had received threatening legal letters from MPs in response to questions it has raised in recent weeks about their conduct.
Under the legal underpinning for the Royal Charter, publishers could now have to pay legal costs for the loser if they win a libel case if they are not members of a press regulator which has recognition under the Government-backed scheme.
He said: "If that's not an impediment to free speech, what is?"
May replied: "Free speech doesn't mean you can go around saying anything about anybody just for the sake of it."