THE TV3 consortium is seeking a new investor following the decision of UTV to pull out of the television service due to go on air next year.

Yesterday the Minister for Arts Culture and the Gaeltacht, Mr Higgins, who is responsible for broadcasting, said the decision came as a surprise to him. He had been told that discussions with the regulatory body, the Independent Radio and Television Commission (IRTC), were going well and that agreement had been reached on a number of technical areas.

He said the problems that had emerged were not with the legislation or the role of the State, but with the business plan. He was in favour of diversity in both radio and television, he added.

Despite the blow of UTV's decision, the consortium still plans to go ahead with next year's launch of the first commercial independent television service. According to the TV3 consortium, it had not been possible for the IRTC to reach agreement with UTV over terms.

A statement from TV3 said: "While the primary areas of concern have been over UTV's level of control and the extent to which the association of UTV with TV3 might lead to distortions in the market place, the overall viability of the project is not in question." The statement added the consortium had written to the IRTC expressing its appreciation of the IRTC's sustained effort to bring TV3 to fruition and confirmed its intentions to proceed with bringing together the final elements necessary to conclude an agreement and obtain the required financial backing.

According to the statement contained in UTV's statement of accounts, published yesterday, a business plan was submitted to the IRTC and discussions had taken place. "Some of the terms of the UTV/TV3 agreement were unacceptable to the IRTC and, regrettably, we have been unable to resolve all of these to their satisfaction.

There was too much risk in proceeding with the proposals on the terms required by the IRTC, said the statement. No further comment was available from the company.

It would appear at this stage that the differences between the consortium, UTV and the IRTC were ones of who would control the new station, rather than commercial viability.

A statement from the IRTC said: "As negotiations developed, conflicts between UTV's position as an existing broadcaster and its desire to become involved in TV3 became more apparent. Unfortunately, as a result, it was not possible to agree terms that were satisfactory to both the IRTC and UTV." The chairman of TV3, Mr James Morris, speaking to The Irish Times from London, where he was already seeking a replacement for UTV, said it was always part of TV3's plan to have a major broadcaster involved.

Yesterday's announcement was not the end of the road. Discussions were at an advanced stage, and agreement had been reached in a number of technical areas and a programme schedule had been submitted.

Anyone willing to invest would be doing so with fewer question marks hanging over the project, he said.

He was seeking an investor for about 40 per cent of TV3, with between £6 million and £8 million in investment capital.