Talk Radio UK has won the licence for the third national commercial radio station, the Radio Authority announced yesterday.

The speech-based service will start broadcasting early next year from offices near Westminster and is aiming for 17 million listening hours in the first year - an audience of about 4 million.

It will join two national commercial stations on air, Classic FM and Virgin 1215, and has pledged it will commission 500 hours a year of high-quality entertainment, documentaries and drama from the independent sector.

All the Talk Radio UK shares have already been snapped up - a sign the industry expects it to be very successful. Normally the Radio Authority allows newcomers six weeks to sell their shares after awarding a licence.

Critics have claimed it will be a round-the-clock phone-in station, an accusation hotly denied by the company. 'This is not downmarket radio,' said one source at Talk Radio UK. The station was the favourite among six rivals which included Newstalk UK and London Broadcasting Company, which loses its licence in the capital in October.

The licence winner had to fulfill a demanding set of criteria: not only must it place the highest bid, which Talk Radio UK did with a pounds 3.82m offer, it is also expected to meet a quality threshold.

Talk Radio UK achieved this by saying it will appoint Chris Moncrieff, the Press Association's retiring political editor, to cover stories from Westminster. Foreign coverage will also be important. 'The format will be geared towards high level debate and agenda-setting programming. But we're not competing with Radio 4,' the source said.

Britain's first national news and current affairs radio programme for gay and lesbian listeners, Out This Week - broadcast by BBC Radio 5 Live - is to be extended for a further 13 weeks.