Project Kangaroo, a video-on-demand joint venture by the BBC, ITV and Channel 4, is under threat following a ruling from the UK Competition Commission that the platform would restrict competition.

The watchdog said that the service would create a substantial lessening of rivalry, and that it would be "difficult to obtain content from third parties to match [Project Kangaroo's] offer in scale or attractiveness".

The decision follows a five-month Competition Commission inquiry which concluded that "material modifications" would need to be made to Project Kangaroo for it to continue running.

Possible options include "adjusting the scope of the joint venture's activities, or the terms of exclusivity between the joint venture and its parent ". If the companies fail to restructure the platform, "prohibition would also be an option".

The three companies developing Kangaroo said in a statement yesterday that they would "continue to make the case for a service that will be in the vast majority free and non-exclusive and of great benefit and value to British consumers".

"These suggested remedies are not an exhaustive list," the statement added. "They represent possible options that the commission has identified as a starting point for discussion. The shareholders remain committed to engaging with the commission and will continue to work towards launching the service next year."