The Minister for Communications, Mr Ahern, is expected to publish a Bill next week allowing him to divert 5 per cent of television licence fees into a new fund accessible to privately-owned broadcasters.

The Broadcasting (Funding) Bill means that for the first time, licence fee revenue can be awarded to private broadcasters and not just RTÉ.

The decision to take this step was made back in December and was opposed at the time by senior figures in RTÉ, including director-general Mr Bob Collins.

The Bill will now take its place in the Government's legislative schedule and should be passed at the latest in the spring. Based on the current licence fee, about €7 per household will be diverted into the fund. This is likely to begin in 2004/2005. This is a period when RTÉ's finances may come under serious pressure.

While privately owned broadcasters will be anxious to tap some of the funds, there is nothing to stop RTÉ from applying.

According to documents released under the Freedom of Information Act in February, the Minister's original decision prompted concerns from the head of broadcasting policy in the Department.

The documents quoted the senior official warning the Minister that creating such a fund would fundamentally alter the broadcasting landscape in the Republic.

RTÉ's director-general, Mr Bob Collins, was quoted as being alarmed and apprehensive about the idea. He warned that the "principal beneficiaries" of any such fund would be "shareholders of companies located outside the State".

The fund is earmarked for "new, additional, innovative content". The fund will be accessible to all independent broadcasters licensed by the Broadcasting Commission of Ireland. The fund is expected to amount to approximately € 8 million annually.

According to the Department, the fund is aimed at creating "additional innovative public service programming". The fund will be administered by a new body called the Broadcasting Authority of Ireland (BAI).