BBC e-learning plans 'will cost business £400m'

The private sector could lose up to £400m if the BBC goes ahead with plans to spend millions of pounds of licence payers' money to develop an online curriculum for schools, according to a new report.

Companies including Granada, Pearson and Reed Elsevier risk losing over £400m of business, according to the study from consultancy SRU, if the BBC becomes a dominant player in the sector.

The report also issued a stark warning to the government, saying it must level the playing field for companies competing with the national broadcaster.

The report is welcome news to the private-sector companies working in the market. They have long argued that they will not be able to compete with an unfettered BBC.

Broadcasting House has already submitted an application to the Secretary of State for Culture, Media and Sport for its service, which would see it provide interactive online learning materials to support the UK school curriculum.

While the BBC claims it has public support for its £170m proposal and does fall under its public service remit, alternative providers claim the Corporation has an unfair advantage, with deep pockets lined with licence fee money.

SRU also claims that if the government doesn't level the playing field, teachers and pupils will suffer because of the lack of range in resources available.

The BBC today would not comment on the figures in the report but in its defence said its own consultation revealed "widespread support for its proposal" which is designed to encourage the uptake of e-learning.