The planned 10-year loan will include a one-year grace period immediately after it is issued, according to the government's press service.
Before the state loan can be dispersed, the Culture Ministry must draft a bill together with the Justice and Finance ministries on turning ETV and Eesti Raadio into a joint public broadcasting organization. The government said a respective law must be presented to the Cabinet by June 5.
The government also found that in order to obtain a loan with a state guarantee, ETV must sign a spending agreement with the government.
Aare Urm, chairman of ETV, said the government's decision virtually sent the whole lending plan overboard, because the two stipulations are unacceptable to Estonian Television.
"This is a mystical agreement public television cannot get into, because ETV represents society, not the government," Urm said.
He said the conditions added to the decision made its implementation impossible, and added that Estonian Television was in dire need of much more money and had been holding talks with the country's major banks on borrowing 77 million kroons.
"If the sum is 37 million kroons, the circumstances are quite different," he said.
Last week the minimum amount of extra cash needed was 45 million kroons. If ETV cannot pay its bills, it will not be able to continue existing beyond midsummer.
The Finance Ministry, meanwhile, has announced that representatives of the ministry and ETV arrived at an agreement during a meeting on May 18 that the actual need of the country's public television was 30-40 million kroons instead of 77 million.
ETV's budget for the current year is projected at 160 million kroons, 98 million of which will be coming as state support and 50 million from advertising revenue.
Another 50 million kroons needed to host next year's Eurovision Song Contest will apparently be set aside as a separate expenditure item in the state budget. Eurovision has already been included in the list of next year's budget priorities.
According to the city's long-term budgetary strategy paper to be approved by the city government on May 23, the Eurovision Song Contest is one of the priorities for 2002 as hosting it offers an ideal opportunity to give the city a positive image internationally.
Insufficient loan guarantees and complicated guarantee conditions almost forced Estonian Television to give up the Eurovision project and stop broadcasting altogether from June 23, said Urm.
That statement was followed by another, from TV3, one of Estonia's largest private television channels. Juri Pihel, TV3's program director, said the channel is ready to take the contest out of ETV's hands if the European Broadcasting Union suggested that another broadcaster be found.