Speaking in a Commons debate yesterday, Follett said the future of local media lies "at the very heart of the democratic process and in the soul of local communities".
The minister called for private and public sector partnerships to be explored at a local level, admitting historically local government had often turned to other methods to get its news across.
But after acknowledging how drops in print readership has had a "crucial effect" on ad revenue and "changed the economy of the media as a whole", the MP asked: "Is there potential here for a new national network of local media consortia?"
Such intervention is not popular with many local media owners. Talking to Media Week, Lynne Anderson, communications director at the Newspaper Society, admitted publishers are "instinctively against the concept of direct public subsidy", but said changes to media ownership laws and a halt to publicly-funded competition would be welcomed.
Anderson also stressed that good partnerships already exist between many independent local media companies and local authorities, but the publishing of newspapers and magazines should be left to the private sector.
"The NS has called on the government to rein in rather than encourage local councils which seek to supplant the role of local newspapers and compete with them for audiences and advertising revenues, and to ban such costly publicly-funded media services," she said.
"The government is the UK’s biggest advertiser. It repeatedly emphasises the vital democratic role of local newspapers, its high readership levels and its effectiveness editorially, yet it has been systematically withdrawing its advertising from local papers for years particularly at a local government level. It’s an illogical, contradictory and highly damaging strategy."
Also present at the Commons was Ed Vaizey, the shadow culture minister, who said local and regional press find themselves in a "perfect storm". He added: "They will not only have to change their business models radically in any event because of the advent of the internet, but they must do it in perhaps the toughest recession the country has experienced in our lifetime."
The debate follows the Government asking the Office of Fair Trading and Ofcom to examine the merger regime for local and regional media.
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