The proposed service, which forms part of the BBC Executive's wider partnership proposals, aims to promote the development of a standards-based open environment for broadband connected digital TV receivers.

The proposal would see the creation of a new generation of subscription free devices, which would carry both free-to-air channels and a huge selection of on-demand TV services such as iPlayer.

The service would support a wide range of content providers and could allow for films and interactive content in both standard and high definition.

The partnership aims to promote a common industry approach and is open to all public service broadcasters, device developers and other ISPs, with the aim to involve a wider group of partners by launch.

The proposals are subject to BBC Trust approval and public consultation.

Ian Livingston, CEO of BT, said, "Television and broadband are a compelling combination. Together they can offer live TV along with an unrivalled choice of on-demand content and interactive services. It will mean that you can watch what you want whenever you want on your television."

Michael Grade, executive chairman at ITV, said, "This proposal will bring catch-up from the PC to the TV set in your living room, and all for free. This makes convergence a reality. It will also future-proof our free-to-air platforms, Freeview and Freesat."

Mark Thompson, director-general of the BBC, said, "Audiences tell us that they want more services through their TV set. I'm pleased that the BBC is working with industry partners such as device manufacturers, ISPs and other content providers on proposals, which will bring real benefits for consumers."

"We're building on a history of collaborating with and supporting the industry in research and development which includes NICAM stereo, Teletext and Freeview."