The Newspaper Society is continuing to press for a wider inquiry into the impact of council newspapers on the local press after the Audit Commission confirmed it would not be looking into the issue.

As part of their Digital Britain report earlier this year, ministers asked the commission to look into the growing practice of councils seeking paid advertising for their in-house publications.

But as reported on HTFP earlier this summer, the commission’s chief executive Steve Bundred said it was beyond their remit to examine the impact of the practice on the local newspaper industry.

Initially the NS tried to get the comission to revise its view, but it has now asked the Office of Fair Trading to take up the issue instead.

In a letter to the OFT, communications director Lynne Anderson said: “It would be unfortunate, given the concerns expressed by ministers at a senior level within the Government, if the market impact of local authority publications on the commercial local media industry was not examined at all and if no-one was able to make any recommendations to Government on whether constraints should be placed on those local authorities which may be overstepping the mark,” she wrote.

On the launch of Digital Britain, the then communications minister Stephen Carter wrote to the commission highlighting “the adverse impact on local newspapers of the increasing role of local authorities in taking paid advertising to support local authority information sheets.”

He invited the commission to undertake “a specific inquiry into the relationship between advertising in local authority and commercial newspapers, the prevalence of this practice and if restraints should be placed on local authority activity in this field.”

But Mr Bundred rebuffed the move, saying: “The commission’s role and expertise do not lend themselves to examining the health of local newspapers or isolating the impacts of specific local authority practices on commercial bodies. This element of the Digital Britain invitation appears better suited to regulators with a specific competition remit.”

In a separate development, Northern Echo editor Peter Barron has voiced his concerns about council publications competing with local newspapers for advertising revenue in a BBC interview.

Writing on his blog, Peter said the reaction to the interview showed it had “struck a chord” with listeners.

“It is entirely fair to say that yesterday’s BBC news item on council newspapers has produced a bigger reaction than I can remember for a long time,” he said.

“There is very clearly a groundswell of public opinion out there about this issue and councils should take careful note of it.”