The BBC is expected to fund local TV services as part of new commitments by the corporation under the government’s spending review, it has emerged.

It is understood the BBC is set to provide a one-off capital investment in local TV and online services of £25m and meet running costs of £5m a year.

And the corporation has agreed to make no further encroachments into local media markets so regional newspapers are protected, Chancellor George Osborne confirmed.

In the spending review, in which Mr Osborne gave details of major cuts across the country, he said the BBC had committed to reduce its online spend and not expand further into areas covered by local newspapers and other independent media.

He told the House: “The BBC also agreed to reduce its online spend and make no further encroachments into local media markets, to protect local newspapers and independent local radio and TV.”

Last month Culture Secretary Jeremy Hunt confirmed he was pressing ahead with plans for local TV stations despite a report which cast doubt on its viability.

A report by investment banker Nicholas Shott said the plans may need a big corporate sponsor to get off the ground and Mr Hunt had spoken about getting a private company involved to get it off the ground.

The Culture Secretary plans to lift restrictions on cross-media ownership to allow newspaper publishers who already own big city titles to also control TV stations.

The BBC is also set to provide £150m a year for the rollout of broadband to rural areas from 2013, as the licence fee was frozen for six years under the spending review.