The broadcasting stations in China are state-controlled and under the oversight of government media regulators and censors. Websites that provide news or video content are not allowed to operate unless they receive approval from the government.

Foreign broadcasters and TV content providers are mostly off limits to the mainland market with only a few services available in international hotels or on some local TV channels through exchange programmes.

"SMG is hoping to take the lead in tapping the cyberworld to distribute more quality content to cater to mainland audiences," said an official with the company, who spoke on condition of anonymity. "This will be a small but solid step forward in changing the city's media landscape."

At the beginning of this year, SMG president Li Ruigang, known as a technocrat, was told by the Shanghai government to spend one year revamping the company.

At the end of last year, BesTV, a subsidiary of SMG that provides internet-linked television service, set up a consulting joint venture with Walt Disney, triggering speculation that the US entertainment giant would soon be allowed to broadcast in China.

Qiao Mu, an associate professor at Beijing Foreign Studies University, said the agreement between ABC and SMG certainly did not mean Beijing was now more open to foreign media.

"It is not uncensored live broadcast of ABC programmes," he said. "And this means that programmes that are regarded as sensitive will be censored."

ABC said an agreement would be signed on May 4. SMG declined to comment on the matter.