YouTube, the popular video sharing website, is set to challenge established TV broadcasters by offering its own live channels. The plans would enable YouTube's millions of users to chat from their bedrooms, perform music or report on a breaking news story to a worldwide audience in real time. A birthday party or wedding could be broadcast live to family and friends who are unable to attend. The truly committed could start a 24-hour 'lifecast' of their daily activities reminiscent of television's Big Brother.

Born just three years ago, YouTube is now the second most popular site on the internet, according to the online traffic monitor Alexa Internet. It currently hosts around 73 million video clips which are watched hundreds of millions times a day. Its hits have included the teen soap opera Lonelygirl15, a jungle battle between buffalo, lions and crocodiles, and Hollywood star Tom Cruise explaining his passion for scientology.

The long-rumoured live extension was revealed, perhaps inevitably, not at a formal press conference but in a low-budget video shot at a trendy party in New York. Steve Chen, the co-founder of the Google-owned site, was asked by 'videoblogger' Sarah Meyers: 'When are you guys gonna do live video on YouTube?' Chen replied: 'We've never had the resources to do it correctly, but now, with Google, we hope to actually do it this year.'

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The move will further blur the distinction between traditional television broadcasters and online delivery systems. In its first seven weeks the BBC's iPlayer was used to stream or download 17 million TV programmes on to computers, while ITV, Channel 4 and Sky also have growing web services. Sites such as Amazon and Apple's iTunes sell thousands of films and TV programmes for download and new companies such as Joost offer 'TV on the internet'.

A number of video streaming websites already exist but they are regarded by sceptics as largely a platform for garrulous teenagers and mindless minutiae. They include blogTV, Mogulus, Seesmic and Ustream.TV, which was set up by two former US army officers and broadcasts live political debates, talk shows, music concerts, school sports events and 'personal milestones such as holiday gatherings, weddings, grade school events, parties, even births'.

Another contender, Justin.tv started when 23-year-old Justin Kan strapped a camera to the side of his head and invited the world to share his unabridged 'life-cast' in real time. Its current offering includes live weekly chats with a bodybuilder, a video game, the home of a student physicist and Ron Paul Television, a 24/7 channel from the US presidential candidate which at noon yesterday had 11 viewers.

But YouTube, which turned online video clips from a niche interest into a mainstream phenomenon, will hope to repeat the feat with live streaming. It will dwarf its rivals and, after being bought by Google for $1.65bn in 2006 can call upon the search engine's relentless ambition and seemingly limitless resources.

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