In a report, written by former Johnston Press chairman Roger Parry, the Conservatives suggest creating 80 independent news companies staffed by journalists and community volunteers, similar to the Government's proposed consortium paid for by public funds.
The alternative plan would provide local news to websites and TV broadcasters, and suggests creating a local version of the FT's subscription model where some content would be available for free but premium online content would be paid for.
The service would be funded through a mix of display, classified, and sponsorship advertising as well as subscription fees.
The proposal comes as the BBC begins sharing news videos with selected outlets for free, with a view to extending the service further in due course.
The BBC is sharing its content via a phased approach with the first newspapers - Daily Mail, Daily Telegraph, Guardian and Independent - to embed content among those with the largest online audiences.
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