Youth channel will be renamed BBC3

Almost 40 years after it launched BBC2, the BBC is set to start broadcasting a BBC3 channel within the year.

The project has the full backing of director general Greg Dyke and the corporation's new director of television Mark Thompson.

BBC 3 will be a youth and entertainment channel, and is expected to evolve from a major repositioning of the digital channel, BBC Choice. "It has been called BBC 3 internally for some time," a spokesman said.

However, Mr Dyke is expected to make the final decision on a new BBC 3 identity only when clearance has been granted for a bigger budget. BBC Choice operates on £35m a year - tiny by comparison with BBC2's £400m.

Stuart Murphy, the controller of BBC Choice, has been charged with transforming the channel which, BBC executives say, "lacked identity" and was aimed at too wide an age range - from 16-45 year olds.

Mr Murphy said that he is aiming for the sort of viewers attracted to programmes such as ITV'sCold Feet and the BBC drama This Life - people in their late twenties and early thirties who "think the footballers look young, who believe that swearing is not an issue but manners are and think that a good night out is a night out".