FOREIGN ownership of terrestrial and satellite television stations is set to be relaxed under plans being considered by the Government to lure more overseas investment to the broadcasting industry.

Laws are also being considered to limit the number of shares a company can own in one medium if it also has a controlling interest in another.

The development will be included in a new consolidated broadcasting bill being worked out by the Recreation and Cultural Branch. At present, broadcasting legislation is fragmented among several acts.

The new legislation will cover all broadcasting licensees and other outstanding issues such as cross-media ownership.

At the moment, overseas investors can only hold up to 10 per cent of the total share in a terrestrial television station, while the limit for satellite television is 49 per cent.

The Secretary for Recreation and Culture, James So Yiu-cho, said yesterday the Government was considering increasing the limit for terrestrial TV, but he refused to disclose what it might be.

As for satellite television, he said the Government would propose allowing foreign investors to hold as much as 100 per cent.

Mr So said the two should be treated differently because they catered for different audiences.

''Local television stations will be serving the local community only, while Hong Kong is just one of the many transmitting regions of international television stations,'' he said.

''Therefore, the two issues have to be dealt with separately, and because it is very complicated we have to study them carefully.'' The new proposals follow News Corporation's purchase of a controlling stake of 63.6 per cent in HutchVision Ltd, the company supplying all of STAR TV's programmes. It also comes after Kerry Group's purchase of a 34.9 per cent in the South China Morning Post (SEHK: 0583, announcements, news) earlier this year. The Kerry group also has TV interests.

News Corp chairman Rupert Murdoch escaped the ownership restrictions because the actual transmissions of STAR TV are operated by a separate company - HutchVision Hong Kong Ltd, in which he had no shares.

The Kerry group's interest in the Post would also be unaffected except in the unlikely event that the legislation was made retrospective.

Mr So said the STAR and Kerry transactions sparked public concern over cross-media and foreign ownership of the Hong Kong media. It also led to international interest in the territory as a base for satellite TV services for the Asia Pacific region.

While the Government encouraged greater development in the broadcasting industry, they were also careful not to let one large conglomerate monopolise the media because it would adversely affect its freedom, he said.

''We therefore have the intention to limit cross-media ownership in electronic and printed media to somewhere between 10 and 20 per cent,'' he said.

Mr So said his department would finalise the details in the next few months and hoped to put the proposed broadcasting bill to the Executive Council late next year.