The requirement on radio stations to devote 20 per cent of their programming to news and current affairs is a major curb on their profitability, the former chief executive of FM 104, Mr Dermot Hanrahan, has said.

Mr Hanrahan, who is preparing a new radio licence application, said the Broadcasting Commission of Ireland (BCI) should review this regulation because it imposed crippling costs on commercial stations.

The rule applies to stations regardless of their music policy or target market. Speaking after a seminar on restructuring businesses hosted by Farrell Grant Sparks, Mr Hanrahan said that, with several radio firms losing money, action was needed.

"I believe the BCI needs to look at the 20 per cent news and current affairs requirement for all stations. I think, in one fell swoop, the BCI could render almost every station in the city viable by relaxing the requirement," he said.

He said the requirement was unique in Europe and was a "paternalistic" idea forced on stations by a previous government.

"It's absurd, because you have more duplication, more overhead being generated by news services duplicating each other."

Mr Hanrahan, however, conceded that changes were unlikely before two new Dublin licences were issued: one for an alternative rock service and one for a multicultural service.

"I can tell you the cost of providing 20 per cent news is greater than the cost of the remaining 80 per cent for music. And no matter how good a job you do, if there is a September 11th, people are going to tune into RTÉ," he claimed.

Since leaving FM 104 in mid-April, he has been assembling a bid for the new alternative rock licence. A consortium is nearly complete, he said.

Asked could such a station make money, he replied: "Firstly, there is an opening in the market. Secondly, there is only one person who has run a rock station in Ireland and that is me - Rock 104. I think it's viable, but it depends how you define alternative rock. If you mean alternative rock from June 2004 that may be problematic, but there has been alternative rock around for the last 40 years. There is a broad enough selection of music there to make the project viable."

He said the Dublin market had not reached saturation point. But he claimed too many stations were not providing unique offerings. He included NewsTalk 106 in this. Mr Hanrahan is a former shareholder in NewsTalk via FM 104. He said NewsTalk would not be profitable for "at least another two years".

Mr Hanrahan has previously criticised NewsTalk for being too similar to RTÉ. When asked for his current view, he replied: "I think the output is of a high quality. I think there has been an improvement under Dan Healy's direction. But I still think it's going to be a slow road to success because the station isn't as radically different as it should be."

Mr Hanrahan said NewsTalk could succeed and there was plenty of room for more stations in Dublin.