Almost €14 million in licence fee revenue has been set aside in a controversial fund available to private broadcasters, RTÉ and TG4, it has emerged.

Under the Broadcasting Funding Act 2003, the Government agreed to channel 5 per cent of all licence fee revenue into a programme fund.

But due to a range of delays, none of the revenue has been allocated to broadcasters and the fund currently contains €13.9 million, the Broadcasting Commission of Ireland (BCI) revealed yesterday.

The fund could be worth more than €17 million by the end of the year, sources speculate. The increasing number of new houses being built is increasing licence fee revenue, which will bolster the fund further.

The BCI is expected next week to begin a public consultation phase on a scheme to share out the money.

Commercial programming such as Fair City, You're A Star or Celebrity Farm are unlikely to qualify for funding and broadcasters will be asked to concentrate on programming with a strong public service ethos.

Interest last year among broadcasters was negligible, but the size of the fund has sparked interest among commercial radio and TV stations. RTÉ executives are also anxious to secure some of the funds.

If privately owned broadcasters secure some of the funds it will be the first time that licence fee revenue has been used in this way.

The idea was sponsored by the Minister for Communications, Mr Ahern, although he faced strong resistance from some officials in his Department, who said he could be opening the door to large-scale funding of private companies, some of them based in other jurisdictions.

The proposal was announced in December 2002 when RTÉ was awarded a licence fee increase.

Broadcasters can use the money to make new television or radio programmes on Irish culture, heritage and experience. Among the subjects which could qualify for funding are history, the environment, folk and rural issues, and Ireland in an international context.

Commercial broadcasters have privately expressed unease with the narrow range of subjects likely to qualify for funding, although broadcasters such as NewsTalk and several local services outside Dublin could be in with a significant chance of securing funds.

Meanwhile, Kelloggs Ireland has agreed to sponsor RTÉ's coverage of the Olympic Games, although the value of the sponsorship was not disclosed.

McConnells Advertising has produced a number of promotional adverts, which will be inserted into RTÉ's coverage.