Like a dog with a bone, UK media watchdog Ofcom continues to gnaw away at the Blair administration's proposals for funding of state-owned broadcaster, the BBC.

In its latest intervention the regulator recommends the government to increase the licence fee income - currently £2.8 billion ($5.14bn; €4.17bn) paid annually by TV owning households - and give the extra cash to the corporation's commercial rivals to finance their public service output.

Ofcom's comments, contained in its response to the Department of Culture, Media and Sport's proposals for future BBC funding, are sure to antagonise the broadcaster, which has made clear its "fundamental opposition" to any diversion of the licence fee.

The government has pledged to guarantee the BBC's licence income until 2016 with a review in 2012.

Ofcom points out 2012 is the deadline for analogue signal switch-off and the predicted seismic shift in broadcasting. It proposes the funding review should be brought forward to 2010.

It says: "Prior planning and early action are needed to help ensure that other public service broadcasting providers remain in the system alongside the BBC."

The regulator is happier with the DCMS's vision of how the BBC should be run: the current board of governors to be replaced by a trust, chaired by BBC chairman Michael Grade, and an executive board.

However, Ofcom proposes that the trust should evolve into an "independent body, external to the BBC and with responsibilities beyond the BBC".

The ball is now in the government's court.

Data sourced from multiple origins; additional content by WARC staff