Following an avalanche of complaints from commercial broadcasters, internet companies and magazine publishers, UK government culture secretary Chris Smith has appointed a scrutineer to probe whether the nation’s public TV and radio network, the BBC, is abusing its public sector status by engaging in commercial activity.

Leading the inquiry is Kings College London law professor Richard Whish, who will investigate whether there is sufficient blue water between the BBC’s public service broadcasting remit and its commercial division, BBC Worldwide.

Said secretary Smith: “There must be a firm wall between licence fee-funded activity - which must be part of the public service responsibilities for a domestic audience - and commercial activities which must be funded commercially and make a commercial return.”

But while he believed there had been an improvement in the BBC’s fair trading practices, there was “scope for further progress [towards] absolutely open, transparent clarity".

Smith also intends to review BBC Online, the organisation’s highly popular internet service, a red rag to some commercial internet bulls because it provides free news content to mobile phone networks and web portal Yahoo!

Also in the dock is the corporation’s BBC News 24, a twenty-four hour news service, accused by the rival Murdoch-controlled BSkyB of posing a threat to its own rolling news channel.

Separately, BBC director general Greg Dyke told a parliamentary committee last week that the Beeb might help to fund the growth of digital TV services and is investigating ways in which this could be encouraged. It has promised £300 million of licence-payer’s money over the next two years for the general development of digital TV and radio, and this week allocated a further £135m.

News sources: Financial Times; CampaignLive