Osbourne and Madeley snub Strictly Come Dancing

Dance-off: Richard Madeley and Sharon Osbourne

Sharon Osbourne and Richard Madeley had been in negotiations for the new series, in the wake of BBC1 chief Jay Hunt's insistence that costs on the top-rated show be slashed by 30 per cent.

Sacked: 66-year-old dance judge Arlene Phillips

Host Bruce Forsyth has already accepted a £160,000 cut, taking his pay for this autumn's series down from £660,000 to £500,000.

Producers are also thought to face a revolt by the professional dancers, who were asked to take a big cut on the £35,000 series fees, with some allegedly refusing to sign up again.

The turmoil engulfing the show comes after Ms Hunt sacked judge Arlene Phillips, 66, for 30-year-old Alesha Dixon, provoking huge public protest. Ms Hunt, 43, is rumoured to have upset performers with her heavy-handed style since becoming BBC1 controller 18 months ago.

At least three household names are believed to have been "shell-shocked" after being dressed-down by her.

Former X Factor judge Osbourne, 57, is said to have been concerned at the way Phillips was treated and made up her mind to quit when she saw the "ridiculous" pay offer.

A source close to the star told the Mirror: "Sharon is a serious player in America's Got Talent but what the BBC offered was ridiculous. And what happened to Arlene was a disgrace."

Other stars rumoured to be lined up for this year's Strictly include ex-EastEnder Natalie Cassidy and Coronation Street star Reece Dinsdale.

Today the BBC furiously denied the show is in crisis. A spokesman confirmed producers approached both Osbourne and Madeley but said no contracts were ever signed. He added: "We talk to a lot of talent to get a good mix of people."

Madeley's publicist said the presenter was approached but did not sign a deal. Osbourne was unavailable for comment.