ITV and the BBC have been told by the Premier League that they will have to bid 6 per cent more than rival media groups for rights to show live Premiership football.

The restriction makes it even harder for the largest free-to-air broadcasters to challenge BSkyB’s dominance of live Premier League coverage at a time when the satellite broadcaster’s monopoly is ending.

Channel 4 and Five could also be affected if they stop paying BSkyB heavy charges to ensure that their channels can be seen only in Britain. BSkyB is 37.9 per cent owned by News Corporation, parent company of The Times.

The issue arises because the BBC and ITV broadcast unencrypted by satellite. The Premier League insists that it is possible for viewers in France or the Low Countries to watch matches sent by satellite for the UK market free. Both BBC and ITV have been in dispute with Sky over the amount that it charges for encryption — which ran at £17 million a year in ITV’s case. They have decided not to pay for encryption and want to persuade Channel 4 and Five to join them in creating a subscription-free “Freesat” service.

BSkyB paid £1.02 billion to secure the last three-year bundle of live Premiership rights, which run to the end of the 2006-07 season. However, after negotiations with the European Commission, the Premier League agreed that in future no single broadcaster could show all the live matches. The league has divided the matches into six packages of 23 games and given broadcasters until April 27 to submit sealed bids. No broadcaster, or team of broadcasters, is allowed to buy more than five. The league may invite bidders back for a second round if offers do not pass a secret threshold.

City analysts expect the total amount paid to increase modestly because Sky will be keen to ensure that it continues to dominate the rights. UBS, the bank, forecast that Sky would pay up to 3 per cent more for a deal including the separate Irish rights.

With the BBC and ITV facing additional pressure, the two most likely challengers to Sky are NTL, the cable company, and Setanta Sports, the Scottish Premier League broadcaster that is backed by Benchmark Capital.

NTL’s stance has switched in recent months. Initially it said that it was unlikely to bid after an attempt to restrict Sky to three out of six packages foundered, but this month Jim Mooney, its chairman, said that the company was “looking at Premier League football” under the Virgin Sports brand. There is speculation that it may chase three packages aggressively.

NTL’s problem is that its one million sports subscribers are dwarfed by Sky’s five million. Sky subscribers are considered unlikely to switch to NTL, leaving the cable company with a smaller base on which to build its business.

Setanta, the privately owned Irish firm, is expected to bid competitively and the feeling among rival broadcasters is that Sky would be happiest if it scooped the sixth package.