The BBC Trust has approved the corporation’s plans to scrap the BBC3 TV channel and make it online-only in a move set to save the corporation £30m a year, while disappointing hundreds of stars and producers who fought against the channel’s closure.

In its first major decision since Rona Fairhead was appointed as chair of the trust last September, the regulator recognised the “clear long-term potential” in moving online, but admitted there were clear concerns about the loss of services to the key 16- to 34-year-old demographic as well as the BBC’s ability to try out new ideas and develop new talent.

“We want a strong, sustainable BBC which is innovative, distinctive and relevant and has clear boundaries with the commercial market,” said Fairhead. “It is clear that the long-term future of broadcasting is online and the BBC needs to find new and exciting ways to help audiences make that transition, while bearing down on costs overall.”

The closure of the 12-year-old youth-oriented channel will save about £30m a year, according to the BBC, which aims to redirect some of those savings into its drama budget for BBC1. The budget for the new online-only BBC3 will be cut to £30m.

Although it points out that BBC3’s audience is falling, the trust suggested the BBC could run the online version and TV channel in parallel for a yet-to-be decided period of time in order to address concerns about the impact of its closure on young people and those without superfast broadband.