Horwood, the ex-managing director of Trinity Mirror Television, is in talks with Nicholas Shott, the Lazard head of UK investment banking who is running a review of the commercial viability of local TV for the government.
According to The Sunday Telegraph, Horwood will put forward a proposal this week to Shott involving the creation of a single TV channel on multiple digital platforms, which would air local and national content.
His idea is to establish a channel with a national schedule of programming, but enable local operators to "opt out" in certain areas to deliver local shows and adverts.
Horwood believes that local programming - including news and major entertainment formats - could be made available to thousands of homes using the approach.
"The word local has got this connotation of snowy pictures," said Horwood, who previously worked with former The Sun editor Kelvin MacKenzie on local TV network Live TV!.
"That's not what we're talking about. Entertainment formats like The X Factor would work well. The X Factor starts locally [with city auditions] and is only broadcast nationally."
Last year, the United for Local Television campaign group called for local TV to be delivered under a unified Channel 6 brand and given more support by the government.
Culture secretary Jeremy Hunt wants to create a vibrant network of up to 80 local TV stations in the UK, but there has been scepticism about the viability of the sector.
Horwood said that he has had "very positive" talks with local media groups and international private equity firms, with one source saying that his model "looked interesting".
His 12-strong team have spent the past six months planning the channel, including talks with local news groups about providing content in return for a share of the advertising revenue.
"We will have some sales teams selling into the local market, but they'll be working hand-in-glove with our local media partners. We're not looking to attack local media partners," said Horwood.
"We've talked to media buyers and brands and they love this model because they can then get the balance that they've never been able to do before of national and local platforms."
There are a range of options currently being considered by Shott's panel, but it is understood that Horwood's proposal is among the preferred solutions.
However, one area of concern is whether the spectrum required to deliver Channel 6 on digital TV platforms, particularly Freeview, will be available to cover key areas of the country.