The BBC will launch a new interactive local television news service on satellite and broadband before the end of the year.

The nine-month pilot scheme, costing around £3 million, will provide a new service in five areas of the West Midlands in the UK. It will offer 10 minutes of local news once an hour for satellite viewers, available through an interactive application, and on-demand bulletins and clips accessible online for broadband users. It is also hoped that the bulletins will be available as a video-on-demand service on cable television.

The areas to be served are: Birmingham and the Black Country; Coventry and Warwickshire; Herefordshire and Worcestershire; Stoke and Staffordshire; and Shropshire.

The pilot will provide five video journalists for each site, together with a community content producer. The project will test different forms of content contributed by individuals and organisations in the community.

The BBC says it will allow the BBC to reach new audiences with relevant locally based programming, providing a service in line with that already delivered by their local radio stations and online services.

The Newspaper Society has said the plans might deter investment by regional newspapers in their own online services.

The announcement of the new service, to begin in December, came as bulldozers moved in to demolish the former BBC regional centre at Pebble Mill in Birmingham, which has now moved to a building known as the Mailbox.

Once completed, the pilot local news scheme will be subject to an independent public value test and assessment of market impact. If approved by the BBC board of governors, there are plans to introduce around 60 similar services across the UK, which could require an additional 300 to 400 staff.