The Competition Commission has rejected plans conceived by the BBC, ITV and Channel 4 for an on-demand video service called Project Kangaroo.

The watchdog said it was in favour of the innovative proposals but could not permit them to go ahead as the service would pose "too much of a threat to competition".

"The three joint venture partners are the largest TV companies in this country and you would normally expect them to compete with each other on a thing like this," chairman Peter Freeman told BBC Radio 5 Live.

"And we're not against the exciting invention - that's great - but there are lots of other people who can offer it.

"All we're saying is that we don't think these three people should do it together."

The commission report said the project - developed by BBC Worldwide, ITV and Channel 4 - could prevent rival on-demand video services from developing.

Kangaroo would have sold current Channel 4 and ITV programming as well as archived BBC shows.

The three broadcasters currently offer their own shows for free online via the BBC iPlayer, and 4OD.

In a joint statement, the networks said the "real losers" from the ruling were British consumers.

"This is a disproportionate remedy and a missed opportunity in the further development of British broadcasting," they added.

The commission's findings follow a provisional report issued last year which warned Kangaroo could prevent competitors from developing.

04/02/2009 15:38:59