Five feels the pain of £20.8m loss

While the Neighbours and CSI broadcaster made an operating profit of £379,000 in the year to 31 December, 2008, restructuring and the cost of servicing loans pushed Five into a pre-tax loss of £9.1 million.

Accounts for Channel 5 Broadcasting Limited, filed at Companies House, showed it took a further £11.6 million hit on "unused tax losses" from previous years.

The total loss of £20.8 million after tax compared to a £4.9 million deficit in 2007.

Luxembourg-based parent company RTL, which owns a string of European TV companies including X-Factor production firm Talkback Thames, acknowledged the problems at Five by parting company with its chief executive Jane Lighting in spring 2008.

Lighting's successor, Dawn Airey, who was given the twin jobs of chairman and chief executive, has since axed around a quarter of the 290-strong staff after "an efficiency and effectiveness review".

Turnover rose 2% to £344.4 million during 2008, but the accounts indicated Five was hit in the second half of the year "as a result of the current economic climate".

Like ITV and Channel 4, Britain's third-biggest terrestrial TV broadcaster saw a double-digit plunge in advertising revenues after the banking meltdown in September 2008 and this decline has continued for much of 2009.

There are signs of optimism as ITV, the benchmark for the wider market, reported last week that its revenues were set to jump 4% in December — the first increase in 18 months.

Five's accounts show the unnamed highest-paid director, believed to be Lighting, received £1.6 million including compensation for loss of office in 2008.

Airey's remuneration is undisclosed but is likely to be at least £1.5 million.

The broadcasting industry has been in turmoil for months as the recession hits advertising revenues and a growing number of people download shows from websites.

The Government ruled out forcing a merger between Five and Channel 4, but a joint venture between Channel 4 and BBC Worldwide could go ahead.