ATV reacted positively to TVB's invitation, saying it would 'take an active role'. On Tuesday, ATV had said it would welcome further talks with iCable, but iCable did not comment on yesterday's development.

TVB said yesterday it was 'actively negotiating with the IOC', and believed a solution would be reached soon.

Legislator Timothy Fok Tsun-ting, president of the Sports Federation and Olympic Committee of Hong Kong, said a decision on the Games broadcasting arrangements could come as soon as today.

TVB's statement said: 'Once the broadcast right is confirmed, TVB will invite Asia Television Limited to co-produce and co-broadcast the sporting events and related programmes.'

TVB said it was confident that the problem of cross-border rights affecting ATV broadcasts could be 'handled properly through concerted efforts of both parties'. ATV's broadcasts would be watched across the border, where mainland broadcaster CCTV holds the rights to Games coverage.

Games coverage could be shown on the English-language channels Pearl and World using Nicam technology.

ATV said it would 'take an active role in co-operating with TVB'.

The IOC requires iCable to provide at least 200 hours of free Games broadcasts, which puts huge pressure on the Wharf Group-controlled broadcaster to strike a deal with TVB and ATV.

The London Olympics begin on July 27 and Hong Kong sports fans have been wondering when the broadcasting arrangements will be in place. iCable had hoped ATV would broadcast the Games after sorting out copyright issues in the Pearl River Delta.

TVB had rejected iCable's subletting terms as too harsh.

Secretary for Commerce and Economic Development Greg So Kam-leung said yesterday he was optimistic the public would be able to watch the Games on free channels.

'The wish of the IOC is the same as Hongkongers and the government - that the Games would be shown on free-to-air channels.'