The Government plan to support the launch of a new UK-wide network of local TV stations has been dealt a blow with news that City TV in Birmingham has gone into administration.
But there is said to be considerable interest from other operators in taking over the licence.
City TV saw of competition from four other bidders win the local TV licence for Britain's second largest city.
It had planned to transmit 34.5 hours of news per week, alongside arts and sport programming.
The Birmingham station, trading as BLTV, aimed to launch as early as Easter 2013 and expected to collaborate with other local television operators.
It is also planned to to broadcast programmes in foreign languages catering for Birmingham's various ethnic minorities.
But Administrator Duff & Phelps said in a statement: "BLTV was awarded the licence for Birmingham local television following a lengthy competitive process, overseen by Ofcom.
"Unfortunately, it would appear that despite having demonstrated a comprehensive programming proposal, the company was unable to secure the necessary funding to get the project off the ground, having been awarded the licence.
"We are aware of considerable interest from a number of local television operators in continuing with the Birmingham area opportunity and we are already engaging with them, and Ofcom, to secure a successful transfer of the licence."
Some 19 local TV stations are set to launch in the first wave of the new service after 57 bids for the various licences.
Notts TV in Nottingham, Estuary TV in Grimsby, Mustard TV in Norwich and London Live in London are already broadcasting.
After low early viewing numbers London Live has already asked Ofcom if it can slash the number of hours of primetime local content it broadcasts from three hours to one a day.
Some £40m of BBC licence fee cash will help fund Local TV in the first three years – with £25m going on the broadcasting infrastructure and £5m a year being used to subsidise programming.
Local TV stations also benefit from taking the Channel 8 slot on Freeview.
Then culture secretary Jeremy Hunt launched his bid to back a new network of local TV stations in 2010 saying: "Birmingham Alabama, an example some of you may have heard me use before, has eight local TV stations despite being a quarter the size of our Birmingham that, again, doesn't even have one."