Lawyers acting for the Newspaper Society have today called on the BBC Trust and Ofcom to suspend their inquiry into the BBC’s plans for 65 local online video outlets.

The Society’s legal advisers Clifford Chance say the BBC Trust is acting in an “inappropriate and unlawful” manner and is failing to act in accordance with its Charter obligations.

The move follows controversial comments made by BBC Trust chairman Sir Michael Lyons at a Broadcasting Press Guild lunch last month in which he appeared to criticise the local press.

Sir Michael said: “There’s nobody who can be satisfied with the quality of local news in most parts of the United Kingdom. The local press has nothing like the strength that it once had.

“It’s not the same proposition that it was 15 years ago. Will the BBC make it better or worse? That’s exactly the issue to be explored.”

Clifford Chance has pointed out that it is difficult to reconcile these comments with the conduct of an objective public value test.

There has already been a huge backlash from publishers and commentators to the remarks, which the NS and its members fear show that the Trust has already pre-judged the decision to approve the local video proposal before the conclusion of the inquiry.

Newspaper Society director David Newell said today: “The BBC Trust cannot be the chief cheerleader for the BBC, encouraging it to extend local services out of more and more taxpayers’ money, at the same time as being the independent regulator determining the public value of those services and their impact on local media.

“Our legal advice confirms that the Trust and Ofcom are acting in an inappropriate and unlawful manner.”

The Society is calling on the BBC Trust and Ofcom to suspend the current market impact and public value test with immediate effect, and for Culture Secretary Andy Burnham to review the Trust’s conduct.

The BBC plans to spend £68m of licence fee money creating a network of local news video sites which the NS says will duplicate the work of local newspaper publishers.

Mr Newell said: “There are critical issues at stake in this process, relating to media plurality, market interference, and a free press.

“Local publishers have always maintained their independence from statutory content controls, state subsidy and public funding, in order to safeguard the freedom of local media journalism.

“They have invested heavily in developing their digital operations to protect the future of local media businesses and offer the public online local news services, including local video stories, alongside their printed newspapers and other platforms.

“Although these services are still in their infancy, they are beginning to see growing online audiences and revenues and are seen as intrinsic to the local media business model.

“The BBC’s publicly-funded intervention in the local media market with a major development such as BBC Local Video at this critical time against the backdrop of aggressive market conditions, would constitute highly damaging interference and market distortion, competing head to head with every facet of a local media company’s multimedia portfolio, whether mobile, website or broadcast.”