BBC becomes embroiled in online rights row

The row centres on a difference of opinion within BBC Worldwide and what happens to digital revenues relating to two joint ventures.

The BBC is currently looking for a new partner to replace Virgin Media, with whom it jointly owns UKTV.

The auction of UKTV, which is valued at up to £800m and includes the popular repeats channel Dave in its portfolio as well as UK Gold, is being delayed by the row.

The other sale being delayed is that of DVD and video publisher 2entertain business, which is jointly owned by retailer Woolworths.

BBC Worldwide must now decide whether UKTV or 2entertain should own digital rights to BBC content.

Alternatively, the BBC could decide that all profits from digital ventures should be passed directly back to the Corporation to make new shows.

According to a source quoted in the Sunday Telegraph: "The reason why the auction for UKTV is taking so long is because there is the mother of all battles going on inside the BBC for the future of online services."

The BBC is said to be looking to retain its stake in these businesses and attract private equity investors as joint partners.

But potential partners interested in the businesses believe their investment will decline in value without royalties from the distribution of BBC content online.

BBC Worldwide already sells shows on Apple's iTunes and is planning to launch Kangaroo, a commercial version of the iPlayer, in conjunction with rival broadcasters Channel 4 and ITV.

Kangaroo users will be able to either buy programmes to download and keep on their computers, or watch for free in return for viewing advertisements. It is headed up by the BBC's former digital head, Ashley Highfield, who recently relinquished his role to launch the new venture.