Local newspapers could lose up to £3.6m a year in advertising revenue under government proposals to change the rules on advertising company insolvencies.

The Department for Business, Enterprise and Regulatory Reform is looking to scrap the requirement for companies to advertise creditors’ meetings in two local newspapers when firms go into liquidation.

The proposal is part of a broader package designed to reduce the “bureaucratic burdens” on failing companies – saving an estimated £17m a year. It has been strongly opposed by the regional newspaper trade body, the Newspaper Society.