YooMedia, which rebranded from its original e-district mon-iker this year, will develop interactive TV-based games for the kids' television channel at the beginning of next year.
The deal represents Cartoon Network's first foray into gaming on a cable platform, building on its existing portfolio of games within Sky digital's Gamestar iTV service.
Cartoon Network charges 50p a time to play its current games and has attracted more than five million users.
The development of the games coincides with Telewest's launch of a micro-billing engine, which, like Sky's service, can charge users a fee by making the set-top box dial a premium-rate number.
Andrew Fearon, chief operating officer at YooMedia, said the partnership would also provide revenues for the interactive entertainment firm itself.
YooMedia turned over just £9,184 in the first half of this year, and this month announced that 19 of its 52 staff were being made redundant in a bid to reduce costs by 35 per cent.
"We're changing this around from an internet business to pay-to-play," said Fearon. "We were originally ad-based, but that model didn't work for us."
He added: "We are also developing a games portal. There's no shortage of opportunities out there with broadcasters."
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