Media watchdog Ofcom is to allow advertisers to sponsor entire TV channels and radio stations, 15 years after programme sponsorship was first allowed.

The planned change to the broadcasting code is designed to give channels a new opportunity to attract advertising as audiences and revenues fall. The changes are most likely to interest smaller broadcasters although ITV, which has been badly hit by falling advertising revenues, last night welcomed the move.

Under the new rules, sponsorship deals will be subject to specific safeguards, such as preserving editorial independence and protecting under-18s. For example, an alcohol brand would not be allowed to sponsor a children's TV channel.

Channels with a significant amount of news and current affairs such as More4 - where sponsorship restrictions already apply - would not qualify.

Ofcom said audiences will have to be made fully aware of the channel's relationship with the sponsor, whose presence should not be "unduly prominent".

Channels cannot be named after advertisers, although this will not affect broadcasters with prominent brands from other fields such as Hallmark and Saga.

Nor will the change stop advertisers setting up a promotional channel of their own, as the carmaker Audi has done.

David Fletcher, head of research at media buying agency mediaedge:cia, said: "With audience fragmentation, programmes on smaller channels can fail the 'why bother?' test [because] the audience base is too small for advertisers to consider sponsorship - so channel sponsorship will allow a threshold audience size to be sponsored."

But the changes are likely to be less important to the major broadcasters with existing programme sponsorship deal.

Darren Lucas, television director at media agency Initiative, said: "Advertisers are after the Lost audience, not specifically Channel 4 or E4. The scale of the sponsorship and the diversity of the entire audience and programming on the big channels also makes it prohibitive to most advertisers."

But ITV said it welcomed the changes. "We will continue to support the appropriate controls in place and of course maintain our editorial integrity," a spokesperson said.

A Channel 4 spokesman said the broadcaster had no current plans to investigate channel sponsorships.