SENIOR civil servants have told Communications Minister Dermot Ahern he should drop the planned sale of RTE's transmission network.
If the Minister follows their advice it would scupper plans for the introduction of digital terrestrial television in Ireland.
Mr Ahern has been told that because of poor market conditions, the potential price which would be paid for the transmission network has slipped significantly, according to sources.
"It is not a good time to sell when the market is in a downward spiral and that is what the Minister has been told," said one source.
Minister Ahern is due to make a statement on the issue in the coming weeks.
The Government's plan had been to upgrade the network of masts around the country to carry digital signals and transmit extra channels. Some of the new stations would have been made up of RTE content, providing educational, news and children's channels.
However, the bids to buy the transmission service have slipped from ?70m to ?30m due to the worsening economic climate.
It also emerged that the sole bidder for a separate licence to operate the digital terrestrial TV network has withdrawn its application.
The consortium, called It's TV, decided to pull out when it discovered the licence it had applied for could not be used to sell internet and email services. A source said: "They thought it was broadband and could do a lot of other stuff, but that is not the case." In recent years, the logic for introducing digital terrestrial television in Ireland has been diminishing.
When the project was originally conceived, the only companies offering digital television were expected to be cable groups Chorus and NTL. Both firms have been rolling out the extra services. But due to the economic climate and the work involved in revamping the cables, progress has been slow.
But unexpectedly Rupert Murdoch's Sky has entered the market. It now has 250,000 digital subscribers who have installed satellite dishes on their roofs.