Madonna could be unplugged and the London Olympics threatened when the Government sells off radio frequencies used by wireless microphones, the entertainment industry has warned.

The Treasury is expecting a “digital dividend” by selling off a chunk of the radio spectrum to the highest bidder when Britain converts to digital television.

The sale includes the spectrum used to operate wireless microphones, worn by Big Brother housemates, West End musical stars and Madonna during her live concerts.

Mobile phone companies are expected to bid for the frequencies in a multibillion-pound auction to be overseen by Ofcom, the communications regulator.

Lord Lloyd-Webber said that the policy could kill the West End musical while Harvey Goldsmith, the Live 8 concert promoter, said it would be impossible to stage a similar future event.

Entertainment companies currently license a spare chunk of the analogue frequency spectrum at low cost. They claim that they will not be able to compete with mobile giants in an auction.

The 2012 London Olympics are expected to be hit by a loss of the wireless spectrum. Security and coordination of the event, as well as live broadcasting, will require an unprecedented level of wireless communication.

Lord Lloyd Webber is preparing to move future musicals out of London. He said: “If wireless technology is sold off, it would mean the end of musical theatre in this country. We can’t go back to the cabled microphones of the Fifties and Sixties: it would be like asking audiences to go back to a version of the musical Stone Age.”

Pop stars who rely on head-sets for heavily choreographed live concerts would also suffer. Alan March of the British Entertainment Industry Radio Group, said: “It would be the end for all-singing, all-dancing shows such as Madonna’s and Kylie’s. Concerts will be like watching Top of the Popsin the Seventies with a singer tied to a microphone and stand, while guitars are connected by amps by cables.”

Channel 4’s prize asset could be forced off air by the Treas-ury-led policy. Mr March said: “It would be impossible to make Big Brother. The programme is entirely dependent on housemates using wireless microphones.”

Wireless devices are also the main form of communication on film and television sets, as well as backstage at theatre and rock concerts.

Mr March said: “Ofcom wants to auction these frequencies to the highest bidder and the theatrical industry will be unable to match the price offered by mobile phone companies.”

A spokesman for Ofcom said: “We are seeking a digital dividend from the spectrum after switchover. We will guarantee space for live entertainment until 2012. Ofcom would welcome a joint bid from the theatrical and special events sector to use the spectrum at a market price after 2012.”

The spokesman added: “We note the importance of ensuring that there is sufficient spectrum available for special events use during the 2012 Olympic Games.”

Concern over the policy has reached ministerial level. Shaun Woodward, broadcasting minister, told The Times: “There may be some unintended consequences thrown up by the proposed sale. They are being looked at and we will find a way forward.”

Mr Goldsmith said: “We cannot stage the events we do without access to these wireless frequencies. Rock bands are reliant on them.”

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