The decision to scrap a BBC plan to launch local video news websites, which would have threatened newspapers such as the Biggleswade Chronicle, has been greeted with delight by MPs and journalists.

The corporation's proposal for a £68million network of local news websites with video content was widely criticised as unfair competition for an industry already under severe strain.

But BBC Trust chairman Sir Michael Lyons has told the corporation's management to concentrate on improving their existing services because the move would not improve services and did not warrant such a large investment of licence-payers' money being spent on the scheme.

John Francis, editor-in-chief of Premier Newspapers, which includes the Chronicle, canvassed support against the plan among MPs.

He said this week: "I'm delighted that the Trust has scuppered this scheme. We're happy to face commercial competition as publishers of local newspapers and websites, but if it's being bankrolled by licence fee-payers who have given little or no indication that they want this new service that's a different story."

Nadine Dorries, MP for Mid Beds, signed a Parliamentary motion highlighting concerns that the BBC could unfairly dominate the market and praising the good work of local newspapers.

She said: "As a state-funded organisation, the BBC has an unfair advantage over local and regional newspapers, who have to make a profit to be viable.

"The licence fee should not be used to distort the market place in this way."

Ms Dorries had also tabled a number of written questions to the secretary of state for culture, media and sport voicing her opposition to the proposal.

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