The British government appeared to throw its weight behind a proposed partnership between Channel 4 and the commercial arm of the BBC on Thursday and said it would make a decision within weeks. This proposal seems to be finding favour over options such as a merger with Channel Five or "top-slicing" part of the BBC's licence fee.

Speaking at the Oxford Media Convention, media secretary Andy Burnham said Channel 4 was here to stay and it would make sense to look first at a partnership with a public service body.

The media regulator said in a report on Wednesday that Channel 4 could form partnerships with BBC Worldwide or merge with RTL-owned AUDK.LU Five as the broadcaster battles falling advertising revenues and structural changes in the industry. Channel 4, which is publicly owned but funded by advertising, has said it could be running an annual loss of £150 million a year by 2012.

BBC Worldwide is the commercial arm of the BBC that exploits the corporation's content through magazines such as Top Gear and the Radio Times and sells programme formats such as Strictly Come Dancing abroad.

"The Channel 4 brand for viewers is here to stay," Burnham told the audience. "There are still many options as to what this might look like. It makes sense to begin by looking at public sector bodies -- Channel 4 and BBC Worldwide. Of course it is early days, and any successful partnership model needs to continue to meet the needs of the BBC as well as releasing value and resource to create a new model with Channel 4."

He said there was an argument that a fourth principle should be added to Lord Reith's existing three that guide the BBC - to educate, inform and entertain - with "enable". "Seriously is it time to add a fourth [Reithian goal] to put partnership into the BBC?" he asked. "Should the BBC be a supporting hand under others rather than build itself ever bigger?"

Ofcom said in its report earlier this week it did not want to see any money diverted to Channel 4 from the licence fee - a tax paid by every television-watching household to fund BBC programming. But Burnham said he could not yet agree. He later told journalists that the so-called top slicing of the licence fee would be a last resort but that he could not rule it out.

"I'm not taking options off the table, it would be foolish for me to do so. I have clear instincts and clear preferences as to where I go first. Top slicing is in a drawer and ... one of the last drawers I will open in this whole debate.

While it would not rule out other candidates, Ofcom highlighted Five as the commercial organisation that could merge with Channel 4. Andy Duncan, C4's boss, has opposed this idea in recent weeks as making "no sense whatsoever" although Five's parent, RTL, reaffirmed its interest. Channel 4 claims that the cost savings brought by such a merger would not solve the fundamental issues still facing advertising-funded businesses. Duncan also raised that concern that in a part-privatisation of the channel profits would be given to shareholders rather than being reinvested in content.

The government will release its Digital Britain report next week when it will set out further its thinking on the broadcasting industry. The BBC has said it is open to the idea of partnerships and joint ventures but not full mergers, while RTL has expressed an interest in a combination with Channel 4.