BBC 'to take over S4C's funding'
An announcement is expected on Wednesday that the BBC is to take over funding for Welsh-language channel S4C.
It is unclear if it will be asked to meet the whole of the current £100m budget, but the channel would remain operationally separate from the BBC.
UK government sources have told BBC Wales it would retain its "operational independence" and there is no question of the BBC "taking over" S4C.
The S4C authority is due to discuss the issue on Wednesday.
Meetings in Whitehall to decide the new structure were taking place as late as lunchtime on Tuesday, said the source.
BBC Wales understands that S4C chairman John Walter Jones has spoken to Culture Secretary Jeremy Hunt and has been briefed about the changes.
Members of the S4C executive and authority are expected to meet on Wednesday to consider their response, but it is understood they need time to read, digest and consider the proposals.
Welsh Secretary Cheryl Gillan told BBC Wales Today: "No statement has been made, this is a leak, and you'll have to wait for the Spending Review tomorrow.
"But what I've been trying to ensure is that S4C and Welsh language broadcasting continue on a safe and secure footing and we'll continue to press for that."
The Guardian is reporting that under the terms of the deal struck between the UK government and the BBC, the BBC would take over funding for S4C from 2015.
Plaid Cymru AM Rhodri Glyn Thomas said the decision, if confirmed, would be "astonishing".
The former Welsh culture minister said: "That the future of S4C and its independence has been decided in a backroom deal in London by people who have little to no understanding of the importance the channel plays culturally and economically in Wales shows a staggering lack of respect."
"The Conservatives and Lib Dems clearly think that Welsh broadcasting can and should be done on the cheap."
Mr Thomas said the move would call into question the very future of the channel as an independent broadcaster.
John Osmond, director of the Institute of Welsh Affairs (IWA), said such a decision would not be unexpected.
He said: "S4C themselves have talked about closer collaboration with the BBC. They've talked about moving into the same building, for example, down (Cardiff) Bay."
Mr Osmond said there were pros and cons to such a move.
"The minuses I suppose, must be to do with plurality in broadcasting. In Wales we desperately need as many different voices as possible and this would seem to incline in the opposite direction," he told BBC Radio Wales.
"The other thought is perhaps more positive, that the BBC, as we know, is escaping the cuts. The licence fee is flat-lining but it's not being cut.
"To the extent that S4C is part of the BBC operation and might come under the same rubric as it were and that is a positive thing."
Last week, Mr Hunt signalled he wanted to break S4C's funding link with inflation, saying it was "unsustainable".
The Department for Culture, Media and Sport (DCMS) has already asked S4C to draw up a response to budget cuts of either 25% or 40%.
S4C said cuts of 40% to its £100m budget would prevent it fulfilling its legal duty to provide high quality and diverse programming.
Meanwhile, BBC Wales and S4C also said last week they would look at collaboration. Longer-term options included moving both broadcasters into one media centre.