Channel 4 seeks commercial freedom from the Government

Luke Johnson, the chairman of Channel 4, will meet his board this week to finalise a submission to media regulator Ofcom on the state-owned broad-caster's future.

Luke Johnson, the chairman of Channel 4, will meet his board this week to finalise a submission to media regulator Ofcom on the state-owned broad-caster's future.

Executives believe Channel 4 will find it increasingly difficult to fulfil its public-service remit in a more competitive market without changes to its structure and funding.

A document has already been drafted, with up to 10 different proposals. The final draft should be submitted in a fortnight.

A series of "self-help" options are believed to be favoured by some Channel 4 executives. This would leave the broadcaster under state ownership but would lift some of the Government imposed restrictions to help it compete on a more commercial basis.

Under these options, one constraint on Channel 4 - that it can't own over 5 per cent of another broadcaster - would be lifted. This would allow it to buy shares in Channel 5, for example.

It is also not allowed to own shares in independent producers - to prevent it from making its content in-house. Part of its remit as a public service broadcaster is to promote innovative independent programming.

Removing the condition would give it more flexibility to pursue joint ventures with independent producers.

The channel will also consider setting up a not-for-profit trust.

Another option will be to retain the status quo or to seek direct funding from the Govern- ment to pay for programming.

Channel 4 will also flag up the idea of privatisation. However, Mr Johnson has already made it public that he doesn't favour this option.

The board has not yet decided which proposal to recommend to Ofcom.

Media analyst Graham Lovelace said: "It has held on to its peak-time audience share of just under 10 per cent while BBC 1 and ITV 1's have declined.

"[It] generates its revenues from advertising. But its ability to do that is limited by its remit to produce innovative and distinctive programmes, which aren't necessarily ratings winners."