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Council publications are posing a threat to independently financed local papers and undermining the integrity of regional news and local democracy, according to a report by the culture, media and sport committee.

A growing number of free council papers are delivering a party political message whilst masquerading as independent news and undermining the industry.

The report concluded that 'Publications such as Hammersmith and Fulham borough council's H&F News effectively pose as, and compete with, local commercial newspapers and are misleading to the public. It is unacceptable that a local authority can set up a newspaper in direct competition to the local commercial newspaper in this way. Nor should any council publication be a vehicle for political propaganda.'

H&F News has defended its product as the most cost-effective council information service for constituents. A council spokesman said: 'If the council were to scrap H&F News in its current form...it would cost taxpayers an extra £300,000 a year. This is because the law dictates that every council has a duty to communicate with residents and it would cost local taxpayers a least £5,500 a week more if we were to buy adverts and public notices in the H&F Chronicle...H&F News prints a variety of views - both positive and negative - as long as the content doesn't mean we breach the rules of political impartiality that we are duty bound to follow under law.'

The ministers also considered the future of ITV's regional news, whose downfall would threaten the plurality of regional news on television. John Whittingdale, chairman of the committee, stated: 'It is not acceptable for the public to become reliant solely on the BBC for regional television news', and recommended lifting some of the channel's public service obligations to alleviate its current financial burden.

Whittingdale spoke of the 'unprecedented challenges' facing local media, leading to 'the closure of a large number of newspapers, many commercial radio stations becoming loss-making and the possible end of regional news on commercial television.' With these organs of communication and debate folding one by one, he identified 'serious implications for local democracy.'

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