The Institution of Engineering and Technology has a fantastic article about the restoration of classic episodes of Doctor Who for the 50th celebration:
When it came to preparing a VHS release of ‘The Daemons’ (1971) in the early 1990s, the only broadcast-quality source available for all but one of the episodes was a set of monochrome 16mm film negatives.
However, according to Steve Roberts, who was a senior post production engineer for BBC Post Production & Graphic Design, two fans of the series convinced the broadcaster to fund a novel way to ‘recolour’ the serial. Ralph Montagu, a graphic designer at the BBC, and James Russell, an equipment designer at Rank Cintel (which produced film-to-video converters), were aware that another fan had arranged for a colour transmission in Los Angeles in 1978 – seven years after it first broadcast in the UK – to be recorded off air on a U-matic format video recorder. Admittedly, the transmission used the lower-resolution NTSC format standard to the US, but at least it was in colour.
"I’d contacted the BBC’s archive selector in 1992 to ask if he would allow me access to the black-and-white 16mm film prints and off-air NTSC colour copy of the story in order to see if I could combine them into a broadcastable colour version," says Steve Roberts. The archivist put Roberts in touch with Montagu and Russell. "After viewing their test, I could see lots of ways to improve the process, so we collaborated on a full colour restoration of ‘The Daemons’ for BBC2 transmission, and two more stories for VHS release."