Broadband provider Virgin Media is set to lodge a formal complaint with Ofcom, which it hopes will help block the broadcaster's on-demand TV service Project Canvas.

The broadband internet firm believes that the BBC's move into on-demand TV is anti-competitive and will help to destroy the young online TV market.

Ofcom has just two months to decide whether to investigate the claims being made by Virgin Media and other internet service providers - such as Sky.

Virgin Media is also calling on the Office of Fair Trading to put a stop to Project Canvas, claiming it breaks the Competition Act.

"[Project Canvas] will stifle future innovation as well as eliminate existing consumer choice for home entertainment," Virgin Media claimed.

The broadband internet provider added that the companies behind the new venture - the BBC, ITV, Channel 4, BT and TalkTalk - normally compete against each other, but have set their differences aside to create the anti-competitive on-demand TV service.

Sky, whose broadband bundles continue to grow in popularity, has also condemned Project Canvas.