Decisions clearing the way for free-to-air digital television are expected by the end of the year.

The Government favours a BBC-style model, creating at least two commercial-free digital channels with a public broadcaster approach to broaden the fare offered on One and TV2.

Broadcasting Minister Steve Maharey hopes to have a specific plan for TVNZ approved by the end of the year.

He says the Government is "pretty much settled" on an option outlined by former chief executive Ian Fraser in a memo to the TVNZ board shortly before he resigned last October. Under the plan, One and Two would operate much as they do now, maintaining a high audience share and generating "substantial commercial revenue". Both channels would continue to run Charter programmes but without the "spin" that the current operation was a full public broadcaster, Mr Fraser wrote.

A factual channel could show high-end international documentaries, re-runs of One News and minority programmes with a high local content. A second channel primarily for children could screen serious drama and arts at night. Mr Maharey said key issues such as the type of set-top box needed were still to be worked through.