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The news came as part of a wide-ranging new Broadcasting Code published by Ofcom as part a programme to incorporate the six existing guidelines it inherited from the former media watchdogs.

Ofcom said the current ban on product placement would remain in place in the short term, but the development of product placement as a “key source” of funding for commercial broadcasters meant that changes would have to be made.

The regulator confirmed that the issue of product placement will be revisited later in 2005 as part of a wider review of the broadcast advertising market.

In other areas contained in the new code, Ofcom has strengthened regulations regarding broadcast of explicit material to children.

The new code bans broadcasters from using material that could “seriously impair the physical, mental or moral development” of under-18s.

Ofcom chief executive Stephen Carter said: “The new Code sets out clear and simple rules which remove unnecessary intervention, extend choice for audiences and allow creative freedom for broadcasters.”

“It also secures the protection of the under 18s – which our research has shown to be an important priority for viewers.”

Richard Hooper, Ofcom deputy chairman and chairman of the Content Board, said: "Both broadcasters and audiences told us of the need for clarity and flexibility in how we approach these rules. We believe the new Code meets those requirements."

By Kevin May