Project Canvas, the venture designed to bring internet TV to the living room, is likely to launch next spring after it was approved by the BBC Trust.
The Trust's scrutiny of the BBC's involvement in Canvas has been running since February last year and was seen as the last major hurdle to its launch.
Yet it could face a challenge from Virgin Media and BSkyB, which have both opposed the plan. It is understood that at least one company is considering its options over how to proceed, including possible legal challenges.
Yesterday, the Trust gave the BBC permission to proceed with its involvement in Canvas – which is likely to be launched under the name of YouView – "subject to a number of conditions". These include engagement with the industry, prompt publishing of technical specifications and making sure the service remains free-to-air. Canvas must also avoid costs running more than 20 per cent over budget.
ITV, Five and Channel 4 are involved in the venture, as are the transmission group Arqiva, BT and Talk Talk. The plan is to develop a common standard that will allow viewers to connect their set-top boxes to the internet to watch on-demand programming.
Diane Coyle, BBC Trustee and chair of the Trust's strategic approvals committee, said the project "will deliver significant public value for licence fee payers – people with a broadband connection will be able to access a wide range of on-demand content including BBC iPlayer, free of charge, through their TV sets."
She added that the partners were working towards an April launch.
Richard Halton, project director of Canvas, welcomed the news, and said: "The partners will work through the final conclusions and conditions and step up our engagement with the wider industry as we plan towards a consumer launch."