Jeremy Corbyn has proposed establishing a British digital corporation that would commission online TV, offer easy access to archive material held by public sector institutions and operate a social networking arm that could play a role in direct democracy.

“The public realm doesn’t have to sit back and watch as a few mega tech corporations hoover up digital rights, assets and ultimately our money,” the Labour leader said.

He said the British media was failing and that multinational corporations dominated the internet.

Delivering the Alternative MacTaggart lecture at the Edinburgh television festival on Thursday, Corbyn said: “A BDC could use all of our best minds, the latest technology and our existing public assets not only to deliver information and entertainment to rival Netflix and Amazon but also to harness data for the public good.”

Plans for the new public sector organisation, which would sit alongside the BBC, have led to suggestions that Corbyn wants to create a nationalised answer to Facebook.

However, Corbyn’s team say social networking would be one part of the proposed organisation. They suggest the login used to access BDC content could also be used by the public to vote on which programmes the organisation should commission. The same voting system could be expanded to give the public a say on other parts of the Corbynite policy platform, such as how proposed regional investment banks would operate.

“A BDC could develop new technology for online decision making and audience-led commissioning of programmes and even a public social media platform with real privacy and public control over the data that is making Facebook and others so rich,” Corbyn told the audience.

He said it would “become the access point for public knowledge” and that the public should imagine “an expanded iPlayer giving universal access to licence fee payers for a product that could rival Netflix and Amazon”. It is unclear how this would avoid duplicating existing BBC services.

“The BDC could work with other institutions that the next Labour government will set up, like our national investment bank, national transformation fund, strategic investment board, regional development banks and our public utilities to create new ways for public engagement, oversight and control of key levers of our economy,” Corbyn said.

He has already announced plans to tax web giants such as Facebook and Netflix to fund the BBC, proposed introducing elections for the BBC’s governing board and backed a new fund for not-for-profit journalism.

Other proposals include potentially breaking up the companies that own multiple local newspapers. In a potentially contentious move, he also proposed forcing large media businesses to give shareholdings to their workers and to allow journalists to elect their editors, based on an indicative ballot system in place at the Guardian.

Although these ideas are not official Labour policy, the leadership says it is committed to the proposals and that they are part of a wider plan to reform the media .

Corbyn used the lecture to criticise the extent to which the UK’s regulated television and radio broadcasters follow the lead of newspapers. “Just because it’s on the front page of the Sun or the Mail doesn’t automatically make it news,” he said.

“A free press is essential to our democracy, but much of our press isn’t very free at all. For all the worry about new forms of fake news, we’ve ignored the fact that most of our citizens think our newspapers churn out fake news day in, day out.”

After being interviewed by the actor Maxine Peake about his reaction to media criticism, he dismissed suggestions from a Daily Mail reporter that the proposals were a punishment for coverage of antisemitism in Labour and his decision to lay a wreath at a cemetery for Palestinians in Tunisia: “I want us to have a strong and vibrant democracy – and I support journalists who want us to have a strong and vibrant democracy.”

Corbyn was also asked to give a simple yes or no response to the question of whether Britain would be better outside the EU, after six times failing to answer a similar question from Channel 4 News. “It is not a simple one-line answer,” he said.