Digital TV bosses set to pull plug

GRANADA and Carlton are expected to pull the plug on their ill-fated ITV Digital venture, paving the way for fresh merger talks.

ITV Digital was put into administration last week after failing to renegotiate a £315m contract with the Football League. The company said it could afford to pay only £50m of the £180m it still owed.

Though Granada and Carlton said they would fund the business in administration, they have agreed to provide finance for only a further two weeks.

ITV executives doubt that a viable solution can be found and believe the business will almost certainly go into liquidation. One said: 'If we were going back to the market with ITV Digital, it would have to be a business that stacked up in every way. But we are a long way from that position now.'

However, Granada and Carlton are understood to be prepared to buy the company out of liquidation to retain a digital TV platform.

Once they resolve their problems over ITV Digital, which has cost them almost £1bn, Granada and Carlton are expected to reopen merger talks. The digital operation is believed to have been a stumbling block when negotiations broke down earlier this year.

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