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A pilot scheme to provide a replacement news service for ITV Wales is to be scrapped, the UK culture secretary says.

Jeremy Hunt said that it would be "inappropriate" to spend scarce public money propping up expensive regional news services.

UTV, which was picked to co-run Wales Live, said it was "not surprised", and the Welsh heritage minister expressed disappointment at the decision.

Cash will go to superfast broadband.

The previous UK government had chosen a provider for local news in Wales after ITV said the service had become too expensive to produce.

Other options are to now be considered regarding the local news service for ITV Wales, as well as the pilots due to run in Scotland and the Tyne Tees/Border region.

The investment bank Lazard has been asked to look at the potential for commercially viable local TV stations in the UK nations and regions.

The Wales Live consortium was chosen by the Department for Media, Culture and Sport (DMCS) in March, with the hope it could be ready to begin by the end of the year.

It was made up of Northern Ireland TV company UTV and north Wales newspaper group NWN Media.

The company said it aimed to bring a "fresh and authoritative" service with the existing ITV Wales news team.

Mr Hunt said that funding for the pilots will be used to support the roll-out of superfast broadband.

"Wherever I go in the country, businesses tell me that access to fast, reliable broadband is increasingly essential," he said.

"Superfast broadband is not simply about doing the same things faster, it's about doing totally new things."

But he also announced plans to reform local cross-media ownership rules.

"We are driving forward greater transparency at all levels of public life - and the challenge and scrutiny of local journalists is vital to that," said Mr Hunt.

"I want a modern regulatory environment which will help nurture a new generation of hungry, ambitious and profitable local media companies."

Welsh heritage minister Alun Ffred Jones said he had written to Ed Vaizey MP, culture minister, to express his disappointment.

"Both the Welsh Assembly Government and National Assembly for Wales, following plenary debate, have emphasised the need to ensure plurality and strong news service to ensure that democratic issues for Wales are available to the people of Wales on channel three," he said.

"The channel three news service should not be looked at as a 'regional news' service, but as an essential democratic national news service for the people of Wales."

'Not surprised'

As well as running the ITV channel in Northern Ireland, Belfast-based UTV also have radio stations including Talk Sport.

NWN's newspapers include the Leader in Wrexham, Flintshire and Chester and weekly titles in Wales, Cheshire and Shropshire.

Michael Wilson, managing director of UTV said the company was "not surprised" by the announcement "given the Conservative Party position on IFNCs (independently funded news consortia)".

"While we will not get a chance to implement our proposals we are proud of the national recognition we received for providing award winning news in Northern Ireland and an unrivalled standard of journalism, high quality production and comprehensive coverage," he added.

An ITV spokesman said: "ITV welcomes the strong emphasis on liberalising the creative enterprise sector in the secretary of state's speech.

"We look forward to engaging fully in the process to remove outdated and damaging regulatory burdens which are holding back Britain's creative industries.

'Innovative concept'

"On news in the nations and regions, ITV wants to provide a quality news service, nationally, internationally and regionally but we can only do so if the right regulatory regime is in place to enable the creative and media sector to thrive overall."

Welsh Secretary Cheryl Gillan said: "In Wales, our priority is for a solution that ensures plurality across the media spectrum.

"I am committed to working closely with media providers in Wales to ensure that Wales continues to have an effective choice in news broadcasting - and to deliver a first-class public news service in Wales."

Shadow Welsh secretary Peter Hain said: "Wales Live was an exciting and innovative concept that would have safeguarded hundreds of Welsh jobs and offered viewers a greater choice of TV news.

"A lot of people had put a lot of work into getting it this far and it's bitterly disappointing that the new government has pulled the plug at this late stage."

Institute of Welsh Affairs chair Geraint Talfan Davies said the scrapping of the planned news pilot was "a tragedy".

He said: "I think it's hugely disappointing and clearly does not take account of Welsh needs or circumstances.

"Whatever the applicability of local TV in England... the equation in Wales is quite, quite different and what is needed here is support for a really strong national news service for Wales, [that is] competitive with the ����ý."