Welsh broadcaster decides to scrap second Welsh TV channel following budget cuts demanded by the UK Department for Culture.

The decision came as a consequence of the announcement that S4C's annual budget will be cut by 25% by 2015 from £100 million down to £75 million.

Until the beginning of 2010, the second Welsh language channel provided live coverage of the National Assembly in Cardiff Bay.

Announcing the scrapping of S4C2, a company's spokesman said: "In light of recent budget cuts announced by the Department for Culture, Media and Sport, S4C has been reviewing how to make the best use of current resources. As a result, a decision has been made to terminate the S4C2 channel."

An spokesman for the Welsh Assembly Government said: "This is disappointing news as it clearly means less opportunity to further develop Welsh language television services for viewers."

The future of Welsh broadcaster S4C has been the centre of controversy after it was announced that funding will no longer come from the UK government but from the BBC, the UK's public broadcaster.

The decision to change S4C's funding model has raised fears that the Welsh channel will lose its corporate identity and editorial independence, as the BBC will have effective control over S4C's finances and operations.