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S4C should have to find similar savings to ´óÏó´«Ã½ Wales when it is funded from the licence fee, the ´óÏó´«Ã½ Trust has proposed.

The Trust said it was offering the Welsh language channel a "broadly stable" funding arrangement.

S4C's allocation would fall from £76.3m in 2013/14 to £74.5m in 2016/17 as part of the new relationship between the two broadcasters.

Members of the S4C Authority discussed the deal on Monday night.

They declined to provide any details about what was said but are expected to issue a statement on Tuesday.

The UK government is handing over responsibility for funding S4C from the Department for Culture, Media and Sport (DCMS) to the ´óÏó´«Ã½.

´óÏó´«Ã½ Trust chairman Lord Patten said the contribution should remain "broadly stable" for the remainder of the licence fee settlement, requiring S4C to "achieve only the same level of efficiency that the Trust is setting for ´óÏó´«Ã½ Wales".

"Providing funding at this level reflects our commitment to supporting a strong Welsh language service," he said.

It would also allow S4C to protect its budget for programmes, Lord Patten added, with the possibility that the channel could increase the money available for commissioning independent producers if it works with the ´óÏó´«Ã½ to "reduce unnecessary operational duplication".

The funding does not include the 10 hours a week of programming the ´óÏó´«Ã½ currently provides S4C, such as the soap opera Pobol y Cwm and the news service Newyddion, worth about £23m a year. It is expected to fall to about £20m by 2013.

In return for providing most of S4C's funding, the ´óÏó´«Ã½ wants a role in appointing the channel's authority and establishing the terms of licence-fee funding.

In a letter to S4C chairman Huw Jones, Lord Patten called for a management structure at S4C that "balances the principles of partnership with independence for the S4C service".

He writes: "The proposed new partnership for S4C always envisaged a closer working partnership between our two organisations.

"I strongly believe that such a new partnership will not only strengthen the ´óÏó´«Ã½ and S4C, but also enhance the Welsh language services that we both provide."

In a statement, S4C said: "We note the funding terms proposed by the ´óÏó´«Ã½ Trust, which are an important new contribution to the ongoing discussions".

Elan Closs Stephens, the ´óÏó´«Ã½'s trustee for Wales, said it was time to "get together," because people in Wales had "torn each other apart on this issue for a long time".

She added: "I think this is probably the most generous position that the ´óÏó´«Ã½ Trust could accomplish and it is, I think, an expression of goodwill towards the channel and towards Welsh language audiences."

Ms Closs Stephens said it was a "difficult situation" that neither broadcaster had sought, but it was time to "move forward".

Plaid Cymru broadcasting spokesperson Bethan Jenkins said the announcement was in part good news, but the funding formula was only part of a package of measures.

"There are outstanding questions on what conditions may be put on the funding," she said.

"We also need assurances that the ´óÏó´«Ã½ wouldn't withhold funding if the trust disagreed with S4C's editorial and corporate decision making."

Adam Jones, of Cymdeithas yr Iaith Gymraeg [the Welsh Language Society], said the group will consider the implications of the announcement at a meeting of its ruling body on Saturday.

"However, over four years, the government is cutting its grant to S4C by 94%, and the ´óÏó´«Ã½ have today proposed further cuts to their contribution after 2015," he said.

Last year, the ´óÏó´«Ã½ contributed £7.6m to Gaelic television channel ´óÏó´«Ã½ Alba, which also draws on commercial revenue.

Gaelic was spoken by about 58,600 people at the time of the 2001 census, compared to 582,000 Welsh speakers.