Scottish Radio Holdings will break into the local radio market by buying the loss-making station, Dublin's Country 106FM.

The Broadcasting Commission of Ireland granted approval in principle for the purchase of the country music station at a meeting on Monday, although final terms have not been agreed yet.

The development is seen as a precursor for other possible acquisitions by Scottish Radio Holdings in the local radio market. The group owns a string of local stations in Scotland.

Asked whether other opportunities were being assessed, a spokeswoman said: "If the market is right and the opportunity is right they will expand further."

It is thought the consideration for Dublin's Country will be small because the station captured only a very small share of the audience since going on air last October.

Joint National Listenership Research figures published last month show the station had a 2 per cent share of the Dublin market in the January-June period.

Trading was described as "very difficult" by one of the station's owners, Mr David Harvey, who is presenter of the Crimeline television programme on RTÉ.

He said conditions were poor when the station launched, soon after the attacks last September in the US.

With a 26 per cent stake in the station, Mr Harvey was the second largest investor. The largest shareholder was the founder of the Yeoman International investment business and chairman of the Ardagh group, Mr Paul Coulson. The musician Mr Paddy Cole and radio presenter Mr Paschal Mooney were among a group of minor shareholders.

Mr Harvey declined to quantify the losses but said shareholders had spent some €1.3-€1.4 million to keep the station on the air.

The number of staff was reduced to 15 from 30 as the station failed to meet its advertising and listenership targets.

"It's been a very tortuous experience in some respects," Mr Harvey said.

"It certainly never dawned on us that it was going to be quite as difficult as it was."

Scottish Radio already owns the national station Today FM but the latest deal marks its first move into the local market in the Republic.

Since 1996, the group has spent more than €100 million developing its portfolio of Irish interests, in the regional newspaper market particularly.

Its interests include the Kilkenny People group; the Tipperary Star; the Nationalist and Munster Advertiser; the Leitrim Observer and the Longford Leader.

The group is a former owner of Ireland on Sunday, which it sold last year to Associated Newspapers.

A spokeswoman declined to comment when asked whether the group was discussing a bid for the Limerick Leader group.

Scottish Radio's 29.5 per cent shareholder Scottish Media Group is under pressure, due to its €627 million debt.

Scottish Media has admitted the €232 million on its Scottish Radio shareholding was too high and the stake is rumoured to be on the market.