Culture secretary Jeremy Hunt said that plans to create a network of city-based local broadcasters was his top media priority along with boosting broadband coverage across the UK.
Speaking at the Edinburgh TV festival on Saturday, Hunt confirmed that the government's aim was for ITV to drop its commitment to provide regional broadcast news when its broadcasting licence comes up for renewal in 2014.
ITV currently subsidises a broadcast news network across England and Wales to the tune of up to £50m a year and employing around 600 editorial staff.
During a Q&A session Hunt was asked if post 2014 the "lights would go out" in large parts of the country for anything other than the BBC news services.
Hunt said: "I accept the case that for ITV to compete commercially it needs to have a lighter touch regulation than it has had previously. I'm trying to find a structure for local news that would mean that we would have no regional news obligations on ITV licences in that 2014 licence... "This is a Government that believes passionately in decentralisation and in putting power in the hands of local individuals and local communities...We need to be making more space for local voices.
"I think we should set out sights high on this. It's the biggest single gap in English public service broadcasting."
Dominic Ponsford is the editor of Press Gazette.