LOCAL and regional newspapers may be given Government cash because of their vital importance to local democracy, a minister said yesterday.

A landmark report into the future of Britain’s media in the digital age is exploring whether local newspapers should receive financial support, Business Minister Ian Pearson revealed.

Mr Pearson also hinted that he favoured a re-write of the competition rules, to allow joint ownership of local newspapers, radio and television – an issue currently being investigated by media watchdog Ofcom.

The comments came during a Commons debate on the challenges facing local and regional newspapers, which have been affected by a slump in advertising revenue and a shift of readers to the internet.

The Northern Echo is among the papers that has recently announced redundancies, sparking fears that coverage of local councils, courts and communities will suffer.

MPs from across the country spoke out in favour of Government help during the 90-minute debate, which was led by Dr Ashok Kumar, Labour MP for Middlesbrough South and East Cleveland. Dr Kumar told the minister: “It is clear that there is a case for some form of rescue package for those local papers which are struggling.”

The “Digital Britain” review, being carried out by Communications Minister Lord Carter – which could report back as early as next week – is aimed at completing the switch from analogue to digital technology by 2012.

Lord Carter has already hinted that, in a fully-digital future, the BBC may have to share state funding through the licence fee for public service content.

But Mr Pearson went further when, in response to the calls for financial support for local newspapers, he said: “It is something which is being considered within the Digital Britain initiative, which Lord Carter is taking forward.”

The minister acknowledged that state funding raised “complex issues”, not least the need to ensure there was no threat to editorial freedom.

And he made clear that the “primary responsibility” for responding to technological revolution and changing market circumstances rested with the media organisations themselves.

But Mr Pearson also voiced his support, by saying: “A thriving local press is important to the health of local communities and local democracies. I don’t think there is a single MP who would deny its key role.”

Dr Kumar suggested that any rescue package should be funded from the forthcoming auction of the spectrum for analogue television channels, when the digital switchover is completed.

Speaking after the debate, the MP said: “The minister said the issue of public money was under review, which is good news.

“I will be pursuing that issue very vigorously, because local papers, such as The Northern Echo, are the lifeblood of their community.”