Industry specialists will look at the benefits of libraries lending ebooks in a move publishers say will have 'serious implications' for the book trade

Culture minister Ed Vaizey has announced a government review of ebook lending – a thorny issue that publishers believe could have "serious implications" for the book trade.

To be led by publisher and Forward prize founder William Sieghart, the government's ebook lending review will call on the expertise of authors, publishers, librarians and agents, with the novelist Joanna Trollope, the literary agent Caroline Michel of PFD and Stephen Page, chief executive of Faber & Faber, all set to contribute.

The review will look at the benefits of ebook lending in libraries, as well as at demand for the service and its possible consequences, including its effect on publishers.

"E-lending is currently in its infancy but growing fast," said Vaizey. "Just as ereaders are transforming the way people access books, e-lending could help transform the way people use libraries. By acting now we can help influence the growth of e-lending to ensure that libraries, authors, publishers and the public all benefit from this potentially valuable new service."

At present, only some of England's library authorities allow books to be lent electronically – and many publishers are nervous of making their books available for e-lending, particularly given that there is no recognised system for payment (an issue that has prompted an outcry from authors).

"When it is as easy to buy a book as to click a button and borrow one, a lot more people are going to take the borrowing option, and that has serious implications for authors and their royalties, for booksellers and as well for publishers," Publishers Association chair Richard Mollet told Channel 4 yesterday.

In the US, libraries and publishers are also locking horns over the issue, with the American Library Association's president, Maureen Sullivan, hitting out at Simon & Schuster, Macmillan and Penguin's decision not to lend their ebooks. "We cannot wait passively while some publishers deny access to our cultural record," she said in an open letter on Tuesday.

US publishers are fighting back. "Publishers support the concept of e-lending but must solve a breadth of complex technological, operational, financial and other challenges to make it a reality," said the Association of American Publishers in a statement. "At a time when individual publishing houses are more actively engaged than ever in exploring viable solutions to e-lending, we are disappointed that the new leadership at ALA chose this path, with this particular timing, to criticise those efforts."

In the UK, one solution suggested to assuage publisher fears was MP Justin Tomlinson's idea that "a small charge for an ebook should be applicable, with the money shared between the publishers and the physical community library".

Sieghart admitted that there were "currently many unanswered questions about the best way forward" for e-lending, but called the prospect an "exciting new development for libraries". He will issue a call for evidence shortly, with the panel – which also includes Janene Cox, president of the Society of Chief Librarians, and British Library chief executive Roly Keating – to report back in the new year. "Lending ebooks and audio downloads is already an important part of the offer for many public libraries and it does offer a great new way for people to access library services through the web and their mobile devices," said Cox. "I don't believe that they will replace printed books or other information sources totally, but they will complement and enhance them."

Shadow culture minister Dan Jarvis called the review "a welcome step in the right direction", but said it was "a long way short of the strategic vision which local authorities and libraries need from the government as libraries across the country face the threat of closure".

"In the first half of 2012, sales in ebooks have increased by 188%, demonstrating a huge appetite for them as we increasingly use Kindles and iPads," said Jarvis. "If libraries are to evolve and meet the needs of today's communities, ebook lending must be a key part of their development."