A new web-connected television service will be launched next year combining Freeview channels with the internet and on-demand services.

YouView, which is backed by the BBC, ITV, Channels 4 and 5 and broadband providers including BT and TalkTalk, will offer access to Freeview channels as well as websites including BBC iPlayer and YouTube.

Chief executive Richard Halton said it would make television a "much more diverse, rich, interactive experience".

The service, which was previously known as Project Canvas, will work through set-top boxes.

They are expected to sell for around £200 and should be in shops by the first half of 2011.

Viewers will be able to buy a box on its own or get it as part of a deal when they sign up to a broadband service.

They will be able to watch the last seven days' catch-up television, record entire series, search for their favourite programmes and pause live television.

Mr Halton said: "It is really important to say YouView is for those 10 million people who decided not to pay, or decided they can't pay, for subscription television."

But the BBC-backed project faces criticism from a number of companies and groups that argue it is anti-competitive.

Companies, including Virgin Media, have lodged official complaints with media regulator Ofcom.

Mr Halton said developers would be able to design dedicated apps which can be used on the service and will open it up to arts groups and media organisations.

Dame Liz Forgan, chairwoman of Arts Council England, said: "The convergence of television and the internet is a huge step forward for audiences.

"We look forward to working with all the Project Canvas partners, and with arts organisations across the country, to deliver our fantastic theatre, dance, music and visual arts directly into even more people's homes through this exciting new medium."